1. The Value of Lean Thinking Presented by: Brian D Krichbaum Process Coaching Incorporated

2. Process Coaching Incorporated Page 1 of 46 © 2008 Process Coaching Incorporated What is Lean Thinking? A systematic approachto identifying and through continuous improvement by flowing the service or productat the pull in pursuit of perfection. eliminating waste of customers

3. Process Coaching Incorporated Page 2 of 46 © 2008 Process Coaching Incorporated History of Lean Manufacturing 1798 Eli Whitney develops interchangeable parts 1933 - Toyota Motor Company established 1908 through 1913 Henry Ford develops the moving assembly line. 1920’s Sakichi Toyoda develops mistake proofing and 5 Whys August 4, 1937 First supermarket in the United States opened June – August 1950 Deming introduces lean quality principles to Japanese engineers and managers 1950’s - Taiichi Ohno develops the Toyota Production System (TPS)

4. Process Coaching Incorporated Page 3 of 46 © 2008 Process Coaching Incorporated House of Lean

5. Process Coaching Incorporated Page 4 of 46 © 2008 Process Coaching Incorporated Benefits of Lean Production  Reduction in overhead / operating costs  Productivity Increase (30% - 40%)  Throughput Time Decrease (70% +)  Increase Profit  Customer Lead Time Reductions (50% +)  Work in Process Inventory reductions (70%+)  On Time Delivery to customers (95% +)  Quality Performance Improvements

6. Process Coaching Incorporated Page 5 of 46 © 2008 Process Coaching Incorporated The Eight Deadly Wastes  Overproduction  Waiting  Transportation (Moving)  Non-Value Added Processing  Excess Inventory  Defects  Excess Motion  Underutilized Resources

7. Process Coaching Incorporated Page 6 of 46 © 2008 Process Coaching Incorporated Value Added Activity What is value added activity?  Tasks that customers recognize as valuable  Tasks that are done right the first time  Tasks that transform the product or service 5% Value Added 95% Non- Value Added

8. Process Coaching Incorporated Page 7 of 46 © 2008 Process Coaching Incorporated Lean Manufacturing Principles 1  Specify Value  Identify the Value Stream  Make value creating steps flow  Let the customer pull product  Strive towards Perfection 1 James Womack, Lean Thinking, (Simon & Schuster, 1996), p. 16 - 26

9. Process Coaching Incorporated Page 8 of 46 © 2008 Process Coaching Incorporated Lean Manufacturing Principles  Correctly specifying value is critical in lean thinking  Providing the wrong good or service the correct way is still waste  Value must be defined in terms of specific products at specific prices at specific times  Only the ultimate customer can define value – but they often don’t know how to do it! Specify Value

10. Process Coaching Incorporated Page 9 of 46 © 2008 Process Coaching Incorporated  Customers and producers must challenge old value definitions and work together to define what is needed – not just a better widget  Look at the “whole” product – not just the features, but how it is used – to determine it’s requirements  Define the Target Cost (the cost of producing the product waste free) Lean Manufacturing Principles Specify Value

11. Process Coaching Incorporated Page 10 of 46 © 2008 Process Coaching Incorporated  When the steps for producing a product aren’t identified, they can’t be challenged  The purpose of value stream mapping is to identify waste  We map the current state and the future (lean) state  All value streams have internal (our plant) and external (our plant + suppliers + customers) components Lean Manufacturing Principles Identify the Value Stream