1. M A N U F A C T U R I N G E X T E N S I O N P A R T N E R S H I P MTES maryland technology extension service Management Information Session Lean Manufacturing Maryland Technology Extension Service Contributions made by the Lean Manufacturing Working Group * Locally known as Alabama Technology Network/University of Alabama, Huntsville; Georgia Manufacturing Extension Partnership; Massachusetts Manufacturing Partnership; Michigan Manufacturing Technology Center; Delaware Valley Industrial Resource Center; and Tennessee Manufacturing Extension Partnership

2. maryland technology extension service MTES 2 OBJECTIVE nTo present a brief introduction to Lean Manufacturing to address the following: 1. What are the benefits of Lean Manufacturing? 2. What parts of the Organization are affected by Lean? 3. What are the “Keys To Success” in implementing Lean?

3. maryland technology extension service MTES 3 What Are The Benefits of Lean?

4. maryland technology extension service MTES 4 WHY COMPANIES INTRODUCED CELLULAR MANUFACTURING 1. On-Time delivery 2. Improved response 3. Reduced inventory 4. Improved quality 5. Improved workflow 6. Achievement of flexibility 7. Culture change 8. Delegation of accountability 9. Better use of plant 10. Better use of skilled labor 11. Job satisfaction 12. Information Flow From Ingersoll Engineers’ Study in “Making Manufacturing Cells Work” Edited by Lee R. Nyman, 1992

5. maryland technology extension service MTES 5 LEAD TIME AND INVENTORY RESULTS LEAD TIME % of Companies No Change4% Decreased up to 25%38% Decreased 25%-50%30% Decreased more than 50%28% INVENTORY % of Companies No Change18% Decreased up to 25%30% Decreased 25%-50%33% Decreased more than 50%19% “A majority of companies rated their overall investment as small or none.” From Ingersoll Engineers’ Study in “Making Manufacturing Cells Work” Edited by Lee R. Nyman, 1992

6. maryland technology extension service MTES 6 nCustomer Rejects Avg. 65% Reduction nManufacturing Lead-time Avg. 59% Reduction nLot Size Avg. 59% Reduction nOn-Time Delivery Avg. 95% –60% based on customer request date –40% based on promised date to customer nApproximate increase in unit Avg. 208% Increase sales volume for specific major products since 1990 From “AMERICA’S BEST - INDUSTRYWEEK’S Guide to World-Class Manufacturing Plants” JIT/Continuous-flow Manufacturing199319941995 96% 96% 100% INDUSTRYWEEK - BEST PLANTS

7. maryland technology extension service MTES 7 Lead Time Reduction Productivity Increase WIP Reduction Quality Improvement Space Utilization 0255075100 Percentage of Benefits Achieved FlexibilitySkill EnhancementVisual Mgmnt

8. maryland technology extension service MTES 8 nSimplified Scheduling nLess Transactions nLess Variation, “More” Predictability nForecasts Become More Accurate nQuicker Response To Design Changes nQuicker Market Response nProblems Are Visible nProduct Team Organization - Eliminates Departmental Conflicts nFacilitates Cross Training nFacilitates Alternate Pay Schemes (Pay For Skills) ADDITIONAL BENEFITS

9. maryland technology extension service MTES 9 BUSINESS GOALS THAT “LEAN” SUPPORTS Turn Sales Orders into Profits as Quickly as Possible Decrease the time period from buying or fabricating components until you get paid by the customer for the finished product. Increase Profits Reduce Costs and Increase Sales. Use Limited Resources Wisely People, Equipment, Buildings, etc.

10. maryland technology extension service MTES 10 What is Lean Manufacturing?

11. maryland technology extension service MTES 11 Lean is a System strategy. Successful implementation is in the Details.

12. maryland technology extension service MTES 12 Toyota Production System Pull Manufacturing Just-In-Time Lean Manufacturing JIT/TQC/EI/TPM Short Cycle Manufacturing One-Piece-Flow Cellular Manufacturing Demand Flow Manufacturing Stockless Production Focused Flow Manufacturing Agility Value Adding Manufacturing Group Technology Time Based Management Synchronous Flow Manufacturing End-Lining Operations Continuous Flow Manufacturing MANY NAMES, BUT THE SAME CONCEPT

13. maryland technology extension service MTES 13 “A team based approach to identifying and eliminating waste (non-value-adding activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection” DEFINING LEAN (OR ONE PIECE FLOW, OR JIT, OR …..) ANOTHER DEFINITION “A manufacturing philosophy that shortens the time line between the customer order and the shipment by eliminating waste (non-value-adding activities).”

14. maryland technology extension service MTES 14 Value Added Any activity that increases the market form or function of the product or service. (These are things the customer is willing to pay for.) Non-Value Added = Waste Any activity that does not add market form or function or is not necessary. (These activities should be eliminated, simplified, reduced or integrated.) DEFINITION OF VALUE ADDED

15. maryland technology extension service MTES 15 Typically 95% of Total Lead Time is Non-Value Added!!! RUN TIME Order Processing, Transport, Storage, Waiting, Rework, Machine Setup, Inspection, Machine Breakdowns, etc... Total Lead Time LEAN = ELIMINATING THE WASTES

16. Raw Stock Q C Rec Ship Shear Screw Machine Q C Stamp Assembly Brake Mill Lathe Weld Finish Grind Parts Stock Drill Value-Added Time : Minutes Time in Plant : Weeks ORDERCASH FUNCTIONAL PLANT LAYOUT

17. maryland technology extension service MTES 17 1. Overproduction 2. Motion 3. Inventory 4. Waiting 5. Transportation 6. Extra Processing 7. Defects 8. Underutilized People ** Producing goods and services that don’t meet customer needs **James Womack, “Lean Thinking” THE 8 WASTES

18. maryland technology extension service MTES 18 The Lean Techniques

19. maryland technology extension service MTES 19

20. maryland technology extension service MTES 20 Cell –A grouping of dissimilar work stations or operations into a flow line to produce a specific product or product family. –Cells can be formed to produce a complete assembly, a portion of an assembly, or a component(s). –Continuous Flow refers to producing one product at a time within the cell. Functional Department –A grouping of similar workstations or operations that perform the same type of function. (e.g. All lathes are located in one area, and all grinders are located in a separate area.) DEFINITIONS

21. maryland technology extension service MTES 21 Cell Advantages Over Functional Department 1. Shorter Lead Time 2. Improved Quality - Quicker problem identification 3. Improved Quality - Less potential rework or scrap 4. Less Material Handling 5. Improved Coordination 6. Reduced Inventory 7. Departmental conflicts eliminated 8. Simplified Scheduling 9. Less Space Required

22. maryland technology extension service MTES 22 FUNCTIONAL DEPARTMENTS AND CELLS

23. maryland technology extension service MTES 23 Case Study

24. maryland technology extension service MTES 24 Original Functional Layout CASE STUDY - INJECTION MOLDER / ASSEMBLER

25. maryland technology extension service MTES 25 Improved Flows - Product Group #1 NOTESMETRICS 6 Cells Flow Distance reduced from 280’ to 34’ Warehouse removed from process Lead-time (molding through packaging) Controlled amount of buffer reduced from 9 days to 5 hours Color coding per cell Lead-time (including all WIP) Parts boxed for shipment in cellreduced from 9 days to 2.5 days Molding Final Inspection eliminated 65% WIP reduction 14% Reject reduction Transactions Reduced 67%+ CASE STUDY - INJECTION MOLDER / ASSEMBLER

26. maryland technology extension service MTES 26 Change

27. maryland technology extension service MTES 27 If we all know we need to improve, the question becomes: why don’t we? BARRIERS TO IMPROVEMENT

28. maryland technology extension service MTES 28 IMPROVEMENT TIME RESISTANT TO CHANGE “IT WILL NEVER WORK” WAIT AND SEE “SHOW ME” READY FOR CHANGE “LET’S GET STARTED” ATTITUDE CURVE RANGE OF ATTITUDES NUMBER OF PEOPLE LEARNING CURVE Involvement leads to Ownership which leads to Commitment which leads to Success. CHANGE CURVES

29. maryland technology extension service MTES 29 nPrepare and Motivate People –Widespread orientation to CI, quality, training and recruiting workers with appropriate skills –Create common understanding of need to change to lean nEmployee Involvement –Push decision making and system development down to the “lowest levels” –Trained and truly empowered people nShare information and manage expectations nIdentify & empower champions, particularly operations managers –Remove roadblocks (I.e., people, layout, systems) –Make it both directive yet empowering KEYS TO SUCCESS

30. maryland technology extension service MTES 30 Summary

31. maryland technology extension service MTES 31 1. Lean Manufacturing is a broad system strategy, but successful implementation is in the details. 2.Lean Manufacturing is an Organization-wide Change Process. 3. Successful Implementation requires commitment & involvement across all levels. 4. Lean solutions are usually no cost/low cost. 5.“World Class” companies are implementing the Principles of Lean Manufacturing. SUMMARY

32. maryland technology extension service MTES 32 THE “END”