1. Introduction Operations Analysis and Improvement 2017 Spring
Dr. Tai-Yue Wang
Industrial and Information Management Department
National Cheng Kung University

2. 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(改善) tools)
Production philosophies such as Just-in-time.
Just-in-time philosophy is also known as Lean Manufacturing.
This slide is a transition to the many Japanese advancements that have come to the U.S. and other countries. Although Lean manufacturing has roots to many cultures, it was refined and systematized by the Japanese.

3. Presentation
Another important philosophy is the concept developed by a Japanese consultant named Kobayashi(小林).
Based on a methodology of 20 keys leading business on a course of continuous improvement (kaizen).
What will we be doing?

4. Cost Lead time 1 20 Leading Technology 16 Production Scheduling 12
Developing
your
Suppliers 11
Quality
Assurance
System 9
Maintaining
Equipment 7
Zero Monitor
Manufacturing 14
Empowering
Workers to
Make improve-
ments 5
Quick
Changeover 4
Reducing
Inventory 8
Coupled 15
Cross
Training 13
Eliminating
Waste 10
Time Control
And
Commitment 19
Conserving
Energy and
Materials 18
Using
Information
systems 17
Efficiency
Control 6
Method
Improvement 1
Cleaning and
Organizing 2
Rationalizing
the system 3
Team
Activities
Cost
Lead time

5. Presentation
The core elements of Kobayashi’s concepts are presented in order to focus on production improvements.
In addition, a measurement standard for improvement results is also explained.
What will we be doing?

6. 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.
Many 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.
Continuous improvement was the core of Henry Ford’s production. It also forms the basis for Kobayoshi’s concepts.

7. 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.
In the beginning!

8. Introduction In 1926 Henry Ford wrote
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.”
In the beginning!

9. 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.

10. Kaizen vs Reengineering
Final situation
Initial situation
time
Reengineering
productivity

11. Kaizen vs Reengineering
The evolution consists of continuous improvements being made in both the product and process.
A rapid and radical change (kaikaku, 改革) process is sometimes used as a precursor to kaizen activities.
Carried out by the utilization of process reengineering or a major product redesign.

12. Kaizen vs Reengineering
Require large investments and are based on process automation.
In the U.S., these radical activities are frequently called “kaizen blitzes”.

13. 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).

14. 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.

15. Improvement philosophies and methodologies
Three main factors that production managers fear.
Poor quality.
Increase of production cost.
Increase in the lead time.

16. Improvement philosophies and methodologies
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.

17. 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).

18. Improvement philosophies and methodologies
The keys to the Japanese success are.
Simple improvement methodologies.
Workers respect.
Teamwork.

19. 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.

20. 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.”

21. Just-in-Time--Introduction
Taiichi Ohno(大野耐一), 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(新鄉重夫) and Hiroyuki Hirano(平野博之) .

22. Just-in-Time--Introduction
Thinking
revolution
Daiichi Ohno (大野耐一 ) and Shigeo Shingo (新鄉重夫 ) 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

23. Just-in-Time--Introduction
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.

24. Just-in-Time--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.

25. Just-in-Time--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.

26. Just-in-Time--Seven types of Waste
Hiroyuki Hirano (平野博之 ) 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.

27. Just-in-Time--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.

28. Just-in-Time--Seven types of Waste
Defects.
Irregular products that interfere with productivity stopping the flow of high quality products.

29. Just-in-Time--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

30. Just-in-Time--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.

31. Just-in-Time--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.

32. 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.

33. Lean Manufacturing
Many of the tools used in lean can be traced back to Taylor, Ford and the Gilbreths.
The Japanese 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.

34. Lean Manufacturing
Lean Manufacturing is supported by three philosophies.
Just-in-time
Kaizen (continuous improvements)

35. Lean Manufacturing Jidoka (自働化). Translates as autonomation.
這個自『働』化與一般的自動化(Automation)不同，它的動加了人字旁，加了人工的智慧。不但會自動生產所需要的零件，也會在發現品質問題時自動停止。引申到一般的生產線自主管理，生產線不但會生產所需的產品，也會在發現問題的時候自動停止！
Jidoka (自働化).
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.

36. 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
98% MUDA
2% VA
Lead Time
90% MUDA
10% VA
Lead Time

37. 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. 20 16 12 11 9 7 14 5 4 8 15 13 10 19 18 17 6 1 2 3

38. 20 Keys to workplace 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

39. Cost Lead time 1 20 Leading Technology 16 Production Scheduling 12
Developing
your
Suppliers 11
Quality
Assurance
System 9
Maintaining
Equipment 7
Zero Monitor
Manufacturing 14
Empowering
Workers to
Make improve-
ments 5
Quick
Changeover 4
Reducing
Inventory 8
Coupled 15
Cross
Training 13
Eliminating
Waste 10
Time Control
And
Commitment 19
Conserving
Energy and
Materials 18
Using
Information
systems 17
Efficiency
Control 6
Method
Improvement 1
Cleaning and
Organizing 2
Rationalizing
the system 3
Team
Activities
Cost
Lead time

40. Quality

41. Cost

42. Lead Time

43. 20 Keys to workplace improvement
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. 20
Leading
Technology 16
Production
Scheduling 12
Developing
your
Suppliers 11
Quaility
Assurance
System 9
Maintaining
Equipment 7
Zero Monitor
Manufacturing 14
Empowering
Workers to
Make improve-
ments 5
Quick
Changeover 4
Reducing
Inventory 8
Coupled 15
Cross
Training 13
Eliminating
Waste 10
Time Control
And
Commitment 19
Conserving
Energy and
Materials 18
Using
Information
systems 17
Efficiency
Control 6
Method
Improvement 1
Cleaning and
Organizing 2
Rationalizing
the system 3
Team
Activities
Quality
Cost
Lead time

44. 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.

45. 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.

46. Overall Equipment Efficiency (OEE)
To improve the productivity of production equipment Nakajima (中島 ) 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

47. 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.

48. Overall Equipment Efficiency
Six main causes that reduce valid operation time.
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.

49. Overall Equipment Efficiency
These six main losses are grouped.
Load time
Useful time
Operating time
Breakdowns
Setup and changeover
Idling and minor stoppages
Reduced speed
Defects and rework
Starting losses

50. 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

51. 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.

52. Overall Equipment Efficiency

53. More on OEE(1/2)
The OEE definition in SEMI E79 is composed of four components.
OEE = Available Efficiency
* Operation Efficiency
* Rate Efficiency
* Rate of Quality

54. More on OEE(2/2) Available Efficiency
= (Equipment Uptime) / (Total Time)
Operation Efficiency
= (Productive Time) / (Equipment Uptime)
Rate Efficiency
= (Actual unit output) / (Theoretical unit throughput)
/(Productive Time)
Rate of Quality
= (Actual unit output – Rework - Scrap)
/ (Actual unit output)