Waste Identification Business Excellence BE-TL1-002-DRAFT-Waste Identification Waste Identification Business Excellence DRAFT October 5, 2007

Table of Contents Overview & Scope 3 Objective 4 Enemies of Lean 5 - 8 Contents Slide(s) Overview & Scope 3 Objective 4 Enemies of Lean 5 - 8 Waste 1 – 8 9 – 23

Overview & Scope Overview Scope A fundamental characteristic of a lean manufacturing is the systematic identification and elimination of waste to reduce manufacturing or operating costs. A relentless focus on eliminating waste will have a profound effect on the quality of the service or product. Scope This module provides an overview of what is Waste, how to to identify and finally eliminate them.

Objective Eliminating all activities that do not add value & or are safety nets, maximize use of scarce resources (capital, people and land) Assist in the identification and steady elimination of waste (muda), the improvement of quality, and production time and cost reduction. Understand how to solve the problem of waste : Lean Manufacturing has several 'tools' at its disposal - the "5 Whys" and mistake-proofing (poka-yoke). improving the 'flow' or smoothness of work (thereby steadily eliminating mura, unevenness) through the system

WASTE, VARIABILITY AND INFLEXIBILITY ARE THE THREE ENEMIES OF LEAN Enemies of Lean Manufacturing WASTE, VARIABILITY AND INFLEXIBILITY ARE THE THREE ENEMIES OF LEAN System (inhibitors) Business flows (inputs) Performance indicators (outputs) Waste People and process Quality Material Cost Variability Inflexibility Information Delivery Feedback loop

WASTE IS WORK THAT ADDS COST BUT DOES NOT ADD VALUE Enemies of Lean Manufacturing Value added Value added Work that directly increases the value of the product (e.g. assembly of parts) Waste Work which does not increase the value of the product (e.g. rework due to wrongly assembled parts or operator waiting-time while machine is running.) Waste Elements of work Objective The objective is to maximize the value added part by eliminating waste and incidental work Incidental work ( Value Enable ) Incidental Work (Value Enable) Non value added, but necessary work (e.g. small movements to reach for material for assembly, quality-checks) WASTE IS WORK THAT ADDS COST BUT DOES NOT ADD VALUE Source: McKinsey

Enemies of Lean Manufacturing THE OBJECTIVE IS TO REDUCE WASTE AND INCREASE THE VALUE ADDED WORK IN ORDER TO REDUCE COST Waste Value added Incidental work Elements of work

The 7+ 1 Waste Enemies of Lean Manufacturing Waste Inflexibility Overproduction Waiting Transporting Overprocessing Inventory Rework Motion Intellect The 7+ 1 Waste Waste People variability Process variability Material Information Customs and practices Configuration Capability Capacity Change-over Inflexibility Variability

WASTE 1 – OVERPRODUCTION To produce sooner or in greater quantities than what customers demand Example - Running bottom side boards faster than top side - Producing excess quantities than customer demand just in case there are rejects along the way - Poor panning and load the line to run model where there is no customer demand - Over production of one combo board…………. Overproduction can prevent other essential activities from taking place Overproduced items need to be stored (inventory) and create further waste Produce only what the customers want, when they want it

OVERPRODUCTION – EXAMPLES Motion Rework Transportation

WASTE 2 – WAITING Under-utilizing people or parts while a process completes a work cycle Example: - Waiting for all the operators to arrive to start a meeting - Waiting for the boards to come out from the machine - Waiting for the boards in trolley sent to the work station - Waiting for handload materials to be despatched - Waiting for technician to rectify the machine - Waiting for board due to upstream bottleneck - Waiting for machine to be converted to next model ……. Most machines do not need supervision Essential wait time can be filled productively0 Rebalance activities to remove waiting, then make essential waiting visible

WAITING – EXAMPLES Motion Rework Transportation

WASTE 3 – TRANSPORTATION Unnecessary movement of parts or people between processes Example: - Essential tools are kept far from work station - Unnecessary long distance between work station - Process is batch build and off-line - Poor planning, walk up and down to get one item at a time during a conversion or line processes - Poor line layout …………… Result of a poor system design and/or layout Can create handling damage and cause production delays Relocate processes, then introduce standard sequences for transportation

TRANSPORTATION – EXAMPLES

WASTE 4 – OVERPROCESSING Processing beyond what the customer requires Example: - Stirring a jar of solder paste over and over - Using tissue to wipe the board surface over and over - Shrink wrap the pallet over and over - Reworking a condition where it is acceptable by spec - Inspection after inspection due to lack of confidence - Unnecessary handling of the board……………….. May result from internal standards that do not reflect true customer requirements Often arises where standards are difficult to define May be an undesirable effect of an operator’s pride in his work Provide clear, customer-driven standards for every process

OVERPROCESSING – EXAMPLE Waiting 7 2 Motion 6 3 Rework Transportation Inventory

WASTE 5 – INVENTORY Material that is not adding value Example: - Upstream processes pump out more then the down stream operations can cope, inventory between stations - Process errors undetected, whole lot of materials held back for rework - Poor planning, load the line with wrong model - Build per Productions convenience, not per customer demand - Operator absenteeism causing line imbalance……… May be raw material, WIP or finished products Symptomatic of a hidden problem Increases operational costs (storage, risk of obsolescence) Increases manufacturing lead time Improve production control system and commit to reduce unnecessary "comfort stocks"

INVENTORY – EXAMPLES Motion Rework Overprocessing

REWORK – EXAMPLES Transportation 4

WASTE 6 – SCRAP AND REWORK Repetition or correction of a process on a product Example: - Using wrong parts due to carelessness of the operator - Giving confusing instructions by the leaders - Poor workmanship of the operators - Operators did not follow standard work procedures - Poor line handling system causing damage - Unnecessary rework due to poor spec knowledge or poor debug diagnostic skills Rework is failure to meet the "do it right the first time" expectation Scrap is product that fails to meet expectation and cannot be repaired Can be caused by methods, materials, machines or manpower Requires additional resources so that normal production is not disrupted Analyze and solve root causes of scrap and rework

WASTE 7 – MOTION Unnecessary movement of parts or people within a process Example: - Poor work station layout, frequent use items are located far from operators - Non flexible line set-up, operators have to move around to get job done. - Poor work station planning, computer screen is placed too high up from viewing height - Handload materials are not placed at suitable location or dispenser ………….. Result of a poor work station design/layout Arrange people and parts around stations with work content that has been standardized to minimize motion

MOTION – EXAMPLES 5 Overprocessing Inventory

untapped, latent potential of people's ideas and actions WASTE 8 – INTELLECT "We know what needs to be done. We tell management, but they don't listen." Overproduction "The biggest issue is making us see that management is going to make it happen." 1 Waiting 7 2 Motion The 8th waste is the untapped, latent potential of people's ideas and actions Intellect 8 6 3 Rework Transportation "We've been through this sort of program before and nothing ever changes . . . " "Management never speaks to us" 5 4 Inventory Overprocessing