1. Five Steps to Lean 1. Define end-customer value for a specific product specific capabilities specific price specific time 2. Identify entire value stream for each product and eliminate waste product realization order fulfillment production 3. Make the remaining value steps flow no waiting, downtime, scrap within or between steps continuous flow instead of batch-and-queue

2. Five Steps to Lean (continued) 4.Design and provide what the customer wants only when the customer wants it –let the customer pull the product from the value stream 5. Pursue perfection by refining definition of value getting value to flow faster

3. Old System for Making Stretch Wrappers Sawing Machining Welding Subassembly Storage of finished goods Storage of parts in process Storage of incoming components Crating Storage of Painted Frames Touch-up Final Assembly Frame Painting Storage of raw materials

4. Evils of Batch-and-Queue Increases work-in-process inventory Hides inefficiencies, lost opportunities Lengthens replenishment cycle Creates finished good inventory Slows customer response time Risks obsolete products

5. New Continuous Flow System Ship finished goods Frame painting Incoming materials

6. One Cell’s Continuous Flow MachiningWelding Sawing Final assembly work Testing and shipping Subassembly of roll carriage Subassembly of control module Frame Painting

7. Old System for Processing Orders Quoting Engineering. Applications Design and BOM Credit checking Regional Sales Coordinator Order entry/scheduling MRP master schedule Production expediters Purchasing Production work orders Sales staff

8. New Continuous Flow System for Processing Orders Order entry/Credit checking Eng. app. by product Quick response team for price quotations Purchasing by product Mfg. Sales Scheduling by product

9. Old and New Systems for Developing New Products Team Leader Mfg. Eng. Engineering Specs Elec. Eng Mech. Eng. Ind. Eng. Purchasing Mech. Eng. Product definition Marketing Elec. Eng.Mfg. Eng. Ind. Eng. Design in concurrent Development Launch

10. Outcomes Number of shipped machines doubled Produce a machine in half the space Number of defects fell from 8 per machine to.8 Better understanding of costs Assigned freed-up workers to Kaikaku team MRP used only to provide suppliers with long-term production forecasts Kanban system used to order parts S-Series was developed in ¼ time of predecessor, ½ of engineering hours

11. Lean Production Principles - Henderson and Larco Lean Production JIT Production Workplace safety, order, cleanliness Six Sigma Quality Empowered Teams Visual Management Pursuit of Perfection

12. The Toyota 5S System Sort - Separate out all items that are unnecessary and eliminate them complete from the workplace. Straighten - Arrange all essential items so that that the are clearly marked and easily accessed, e.g., kanban squares. Scrub – Scrub all machines and the work environment to maintain immaculate cleanliness Systematize – Make cleaning and organizing a routine practice as part of the work day Sustain – Sustain commitment to the previous four steps and provide a constantly improving process

13. JIT Production JIT production means “build to customer demand” Single piece flow means there is a maximum of one piece between each operation Value-added activities should move along without interruption, and non-value-added activities eliminated (aided by process-mapping) Takt time is the “drum beat of consumption” All tasks should take about the same time. Rebalance them if demand fluctuates or workers are absent. Multi-skilled workers facilitate this. Kanban links customer demand to final assembly, and then to internal and external suppliers (synchronization) Changeover time should equal one takt time for final assembly operations

14. If customers order 100 products per day, what is the takt time? If customers order 80 products per day, what is takt time? If customers order 120 products per 8 hour shift, what is takt time? What if some workers are idle part of the time? What if some workers build inventory in front of their work stations? Takt Time

15. Visual Management Scoreboards, e.g., output compared to goals, sales and profits to date, quality, inventory turns, training schedules Kanban cards, kanban squares, shadow boards Flow through racks Limited number of rework bays Color-coded lines, parts Andon lights