1. Lean Operations House Building Game
The transition to Lean Ops
The Paradigm of Lean Operations: The ideal
Basic philosophy of Lean Ops
Lean tools for synchronization & waste reduction
Driving Continuous Improvement through Visibility
J.A. Van Mieghem/Operations/Lean Ops

2. Paradigm of Lean Operations: In Search for the Holy Grail
The ideal Process =
Synchronization of all flows
1 x 1
production on demand
defect free
At lowest possible cost
Waste = Gap between ideal and actual
How do we sync at lowest cost? > Synchronization or Lean Tools
How do we set up a system to continually reduce waste ?
Answer to questions:
Lean tools for synchronization
Visibility for quality at source
Human infrastructure for continuous improvement
House Game Improvements: What did your team do? + Which metrics did this impact?
> batching: define
Transfer batch: reduces T
Load batch: reduces R
J.A. Van Mieghem/Operations/Lean Ops

3. Improvement as a process
OPNS454 Week 9: Improvement and Innovation
Improvement as a process
3/31/2017
The Ideal Operation
perfectly synchronized with demand
at lowest cost
D = deviation from ideal
= waste, variability, inflexibility
= opportunity for improvement
The Actual Operation
Continuous
Improvement
Process
Increase visibility of D
Andon pulls, workplace organization
Exploratory stress
Process measurement, visual management
Remind them of lean ops philosophy discussed in the core class + role of visibility (later, automation may reduce this) and employee involvement in kaizen (standardization will reduce this)
Reduce D
Root cause analysis & problem solving mindset
Waste reduction (Lean tools)
Variability reduction (Six Sigma, TQM)
OPNS454 © Van Mieghem

4. The architect behind Lean Operations:
The architect behind Lean Operations: Toyota’s Taiichi Ohno and waste elimination
“Toyota Production System: Beyond Large-Scale Production” by Taiichi Ohno
Lean operations has been defined as “a business system for organizing and managing product development, operations, suppliers, and customer relations that requires less human effort, less space, less capital, and less time to make products with fewer defects to precise customer desires, compared with the previous system of mass production.”
J.A. Van Mieghem/Operations/Lean Ops

5. There are three elements of work
Value Added Activity
Work or time that directly increases the value of the product in the eyes of the customer (e.g. Assembly of parts)
What the customer is paying for
Value Added Activity
Waste
Work or time that does not add any value to a product
Waste is sometimes called "muda", from the Japanese for waste
Waste
Objective
The objective is to maximise the proportion of value added activity by eliminating waste and incidental activity
Elements of work
Incidental Activity
Incidental Activity
Work or time that does not directly add customer value, but which is currently necessary to maintain operations (e.g. small movements to reach for material for assembly)

6. THERE ARE 7 CLASSIC TYPES OF WASTE “wormpit”
Over-production: To produce sooner, faster, or in greater quantities than actual customer demand
Waiting: People or materials that wait for other work to be completed
Transportation: Unnecessary movement of materials or people between processes
Over-processing: Processing beyond the standard required
Inventory: Material which is not having value added to it
Rework: Repetition or correction of a process
Motion: Unnecessary movement of materials or people within a process
Over-production
Making parts on a piece rate basis to fully load individual machines
Intellect
Failure to make full use of the whole team’s experience and knowledge
Motion
Walking around the factory looking for something or fetching equipment
Waiting
Mortgage applications piling in a desktop in tray 8
Rework
Documenting the same information in several places for a new hospital patient
Transportation
Transferring finished goods to off-site packing and then freighting onto customers
Inventory
Excess stock of drugs or equipment in clinical areas
Over-processing
Polishing a luxury walnut dashboard to a mirror finish on both sides

7. Lean Tool #1: cut batch sizes An illustrative example
Consider the following 4-step process:
What is:
The bottleneck:
The process capacity or maximal R:
The theoretical flow time Tth
The minimal amount of inventory needed to run at capacity:
Ith
Call this scenario 1, the best. Let’s now consider what happens if we have (transfer) batches A
1 min/job
Resource 1 B
Resource 2 C
Resource 3 D
Resource 4
J.A. Van Mieghem/Operations/Lean Ops

8. Lean Tool #1: cut batch size ABCD example continued
Batch Shop (Batchsize = 4)
Flow Shop (Batchsize = 1) A B C D
Elapsed Time 1 T 2 3 4 5
T = I = R =
= scenario ? A B C D 1 2 3 4 6 5 8 7 1 2
Elapsed Time 3 4 9 6 5 8 7 1 2 1 3 2 4 4 3 6 5 9 6 5 8 7 1 2 1 3 2 4 T 8 7 9
T = I = R =
J.A. Van Mieghem/Operations/Lean Ops

9. Synchronization requires smaller batch sizes or even 1x1
Changeover / setup / batch related costs must be reduced if batch size is to be decreased
S. Chopra/Operations/Lean Ops

10. Lean Tool #2: process on demand = pull Just-In-Time operations
JIT = have exactly what is needed, in the quantity it is needed, when it is needed, where it is needed.
“hand-to-mouth” material flow
needed by whom?
J.A. Van Mieghem/Operations/Lean Ops

11. Lean Tool #2: Synchronization with demand:
Lean Tool #2: Synchronization with demand: customer demand pulls product
Supplier
inputs
outputs
Process
Customer
PUSH: Inputs availability triggers execution
Supplier
inputs
outputs
Process
Customer
PULL: Outputs need triggers execution
J.A. Van Mieghem/Operations/Lean Ops

12. Lean Tool #2: how make pull system in house game?
Production
control
Roof
cut
Base
cut FA
Base
assembly
J.A. Van Mieghem/Operations/Lean Ops

13. Lean Tool #2: Pull Implementation: Kanban Production Control Systems
Processing center i
Processing center i + 1
WIP
Job
J.A. Van Mieghem/Operations/Lean Ops

14. Lean Tool #3: Quality at the Source
Defects
Own Station
Next Station
End of Line
Final
End User’s
Found at:
Inspection
Hand $ $ $ $ $
Impact to the
Very
Minor
Rework
Significant
Warranty
Company
Minor
Delay
Resched.
Rework
costs
of work
Delay in
Adminis
tra
Delivery
tive costs
Additional
Reputation
Inspection
Loss of
Market
Share
J.A. Van Mieghem/Operations/Lean Ops

15. Reducing Waste: Quality at the Source
Fool-proof/Fail-safe design (Poka-Yoke)
Inspection
Self
Automated (Jidoka)
Line-stopping empowerment (Andon)
Line-stopping empowerment
Poka Yoke and Jidoka
Trouble!
Approach for operators
• Preventative
• If trouble, STOP!
• If defective don't pass
Approach for machines
A mistake-proofing system prevents errors and defects
Stop line when defects are detected or machine breaks down
J.A. Van Mieghem/Operations/Lean Ops

16. Lean Tool #4: Flexible Resources & Standardized Work
Cross training of workforce allows resource pooling
Use of IT in services
Standardisation helps a system be highly flexible to respond to variability – ball boys and girls have very standardised processes but the ball can go anywhere …
J.A. Van Mieghem/

17. WORKPLACE ORGANIZATION – 5S
5S is a structured approach to systematically clean and organize the workplace to support a lean working environment
Waste identification and elimination
Maintenance of
improved condition
Sort
Set in order
Shine
Sustain
Standardize
Check what is needed and get rid of what is not used
Place each item in its optimal position in the workplace and employ visual management
Keep the area and equipment always clean. Set a cleaning program
Improve and maint-ain the first 3 "S" by improving the en-vironment:
visual controls
standard machine improvements
standard procedures for all similar areas
Employ systems to monitor 5S and ensure that it is constantly maintained
Objectives
Organize the workplace with the aim to
Identify and eliminate waste
Maintain and continuously improve the workplace/equipment
Improve morale and increase worker involvement

18. Lean Tool #5: Heijunka Mixed Level/Balanced Production
Batch Production Schedule Mixed Production Schedule
(AAAABBBB..) (ABAB...)
Product April April A B
FGI
FGI
Stress:
this is only for multi-product settings
Role of setup/changeover time reduction
Role of frozen schedules
Role of mixed pickups/logistics
time
time
J.A. Van Mieghem/Operations/Lean Ops

19. SILS: shipping in line sequence
SILS: shipping in line sequence Business Mall adjacent to Russelsheim’s LeanField
From first signal from Opel for the assembled car with the Sender 1 (body shop) info, there are
The first Lear part which is to assemble is the forward lamp wiring harness, which has a variance of 66 different part numbers. Exhibit 10 shows that Lear has about 130 minutes to provide the forward lamp wiring harness in line sequence to the assembly station F1-01 in Opel’s Leanfield, marked in Exhibit 11. The wiring harnesses are produced in Gödöllö, Hungary, which is km away. The wiring harness manufacturing is labor intensive, so offshore production is necessary due to lower wages. It is clear that SILS is not possible from Gödöllö within 130 minutes. From Gödöllö the parts have to be shipped in containers to a location close by where the parts have to be picked in sequence. Picking in sequence out of a total variance of 66 different containers takes a while, on average 1 minute per wiring harness. If we have the total quantity of parts in mind which have to be delivered in sequence to the final assembly line it is clear that Opel is not able to place 66 bins just for these wiring harnesses in front of their line, not to mention the backup bins.
In order to bring down the logistic costs, the key is to bundle shipments with other parts. Lear has a facility in Gustavsburg which is 10 km away from the Opel plant. For transport we have to calculate 30 min. due to traffic uncertainties. At first glance, this looks feasible but Opel has assigned receiving docks to each of their lines to keep the cross line traffic very low as we can see in Exhibit 11. In line F1/Trim1 Lear has just the mentioned forward lamp wiring harness to SILS. Bundled shipments from Gustavsburg are impossible and single shipment is too expensive.
Opel took this dilemma into consideration when planning its Leanfield and placed a business mall just next to the Leanfield (Figure 11). A shuttle service is operating between them. Now, a bundle shipment with other parts of other suppliers is possible. Opel has outsourced the business mall and the shuttle service to a third party, but they operate on behalf of the individual supplier.
J.A. Van Mieghem/Operations/Lean Ops

20. Lean Tool #6: From Functional Layout to Product Cell organization
Production
Control
Roof
Cut
Base FA
Assy
Department 1
Production
Control
Production
Control
Production
Control
Cell 1
Department 2
Department 2
Roof
Cut
Roof
Cut
Roof
Cut
Base
Cut
Base
Cut
Base
Cut
Production
Control
Roof
Cut
Base FA
Assy
Production
Control
Roof
Cut
Base FA
Assy
Department 2
Department 2 FA FA FA
Base
Assy
Base
Assy
Base
Assy
Cell 2
Cell 3
J.A. Van Mieghem/Operations/Lean Ops

21. Towards a system of continuous improvement: Increase Problem Visibility– Lower water to expose rocks
Scrap &
Rework
Missed Due Dates
Too Much Space
Late Deliveries
Poor Quality
Machine Downtime
Engineering Change Orders
Long queues
Too much paperwork
100% inspection
Inventory
J.A. Van Mieghem/Operations/Lean Ops

22. Visibility: Time plays the role of Inventory in Lean Service Operations
Instead of I, look at promising 2 weeks to customers
But
Track internally whenever T > 13 days,
+ Investigate + Reduce sigma.
J.A. Van Mieghem/Operations/Lean Ops

23. Towards a system of continuous improvement: Kaizen Tools
Reduce variability
Standard operating procedures
Increase visibility of waste and quality at source
Line-stopping empowerment (Andon)
Quality inspection: Self & Automated (Jidoka)
Fool-proof/Fail-safe design (Poka-Yoke)
Targeted improvements: root cause analysis (6 Why’s)
Active worker involvement
Time for experimentation
Supplier involvement
Exploratory stress
Human infrastructure & process measurement and review (visual management)
J.A. Van Mieghem/Operations/Lean Ops

24. Learning Objectives Lean Operations
Paradigm of Lean Operations:
Strive for the ideal by eliminating waste
This is a total business management system
Synchronization Tools
Reduced batch sizes
Pull production control systems (vs. push)—JIT & Kanban control
Quality at the source
Resource pooling
Level loading (Heijunka)
Layout: Cellular operations
Set up a System for Continuous Improvement
Reduce variability (standard operating procedures)
Increase visibility (river analogy)
Improve human infrastructure
J.A. Van Mieghem/Operations/Lean Ops

26. Sears (SHC) does actually have a whole social media team who handles their Twitter and Facebook accounts.  They are VERY pro-active on those accounts.  SHC contracts out to Viewpoints, which is the company I work for.  We run the MySears, MyKmart and Craftsman Community platforms for them, and handle customer service in a pro-active way on those accounts
Along with the senior customer service reps, and folks at corporate, MySears is very fortunate to have a handful of associates or call center employees who pop on to assist, as well.  They are not paid, but are influencers who receive an "Advisor" recognition badge for their help.  We wish we had more folks like these, as their contributions are most helpful. 
Here are a few threads that we would consider "wins" for SHC, as the site helped solve an issue or complaint for a particular customer:
This member was all over the board complaining about the Sears "Lifetime Warranty" on Tools.  He ended up connecting with the VP of Tools through the site, something that would be impossible without utilizing social media: 
Someone who visited having issues with their washer: 
One of the above mentioned "Advisor" that help.  This member who offered his suggestion is actually a retired service techinician who hangs out a bunch on the site: