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Fundamentals of Lean: Lean Is A New Approach To Managing Enterprises
Fundamentals of Lean: Lean Is A New Approach To Managing Enterprises
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 2
Lean Enterprise Value:
The Central Concept
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 3
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 4
Lean was Born out of Necessity
August 15, 1945 -- end of war with Japan
• Toyota faced a daunting challenge: How to succeed against
Western mass production auto giants poised to enter Japanese
market?
• Kiichiro Toyoda to Taiichi Ohno: “Catch up with America in three
years.”
• Ohno’s challenge: How to design a production system exploiting
central weaknesses of mass production model
Japan’s dilemmas
• Small & fragmented market, depleted workforce, scarce natural
resources, little capital
• Lean evolved as a coherent response to this challenge over a
number of decades -- a dynamic process of learning and
adaptation later labeled as “lean production” by Western observers
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 5
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 6
What is Lean Thinking?
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 7
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 8
Types of Muda
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 9
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 10
Lean Thinking: Eliminating Waste
with the Goal of Creating Value
• Customer-focused: Customer needs and
expectations “pull” enterprise activities
• Knowledge-driven: Draws upon knowledge and
innovation from everyone - workers, suppliers
• Eliminating waste: Stresses elimination, not just
reduction, of all types of waste
• Creating value: Puts premium on “growing the pie”,
not just reducing costs, to benefit all stakeholders
• Dynamic and continuous: Pursues on-going
systemic as well as incremental improvement - both
innovation and continual improvement
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 11
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 12
5 Steps to Becoming Lean
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 13
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 14
1. Define Value
Definition
ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 15
Cuser
C
shareholder
C
employee
C
environmental
ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 16
2. Identify the Product’s Value
Stream
The Value Stream Consists of the Actual
Tasks Required to Bring a Specific Product
Through Three Critical Processes:
Design -
Problem-solving From Concept Through Detailed Design
and Engineering to Production Launch
C
U
S
Order - T
Information Management From Order-taking Through O
Detailed Scheduling to Delivery
M
E
Make - R
Physical Transformation from Raw Materials to Finished
Product In the Hands Of the Customer
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 17
What Is a Value-Added Activity?
Definition
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 19
Waste
Definition
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 20
3. Flow the Product
1. Eliminate 2. Prefer One 3. Focus on the Product
Activities That Piece Flow and Its Needs Rather
Are Pure Waste Where possible Than the Organization
or the Equipment
ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 21
A B C D
= Different
Processes
Processing Time = 1Min./ Unit
ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 22
Batch Production Example
Processes - Oriented Layout
With Transfer Lot Size of Five
Throughput Time (5 Units) = E
L 0 A B C D
A
5x1 + 5x1 + 5x1 + 5x1 = P
S 5 A B C D
E
20 Min.
D
10 A B C D
T
Work in Process I
M 15 A B C D
E
5+5+5+5=
M 20 A B C D
20 Units I
N
A B C D
= Different
Processes
Processing Time = 1Min./ Unit
ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 23
1+1+1+1= 4 A B C D
T
I 5 A B C D
4 Units M
E 6 A B C D
M 7 A B C D
A B C D
= Different I
Processes N 8 A B C D
Processing Time = 1Min./ Unit
ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 24
One - Piece Flow Example
Product-Oriented Layout
Throughput Time (5 Units) =
With Lot Size Of One
1x4 + 1x1 + 1x1 + 1x1 + E 0 A B C D
1x1 = L
A 1 A B C D
8 Min. P
2 A B C D
S
Work in Process E
3 A B C D
D
1+1+1+1=
4 A B C D
T
4 Units I 5 A B C D
M
E 6 A B C D
A B C D
= Different M 7 A B C D
Processes I
Processing Time = 1Min./ Unit N 8 A B C D
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 25
4. Pull
• Definition
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 26
5. Strive for Perfection
• Continuous radical
and incremental
improvement
• Continuous
Banishment of muda
• Pursue Perfection, Not the
Competition
• There Is No End to the
Process of Reducing
Efforts, Space, Costs and
Mistakes
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 27
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 28
Lean Thinking is Linked to & Complements
Other Systemic Change Initiatives
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 29
Value Stream
Mapping
Using the Value Stream Mapping Tool
Product
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 32
What is a Value Stream Map?
• Includes:
• Information and Materiel Flow Integration
• Product Through-Put and Cycle Times
• Resources Utilized
• Value Added Times
• Location of Significant Waste
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 33
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 34
What Flows Through a Value
Stream?
“Material Flow”
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 35
Source: M. Rother and J. Shook, Learning to See, Lean Enterprise I nst itute, 1998
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 36
Basic Steps to VSM
1. Define the boundaries
2. Define the value
3. “Walk” the process
• Identify tasks and flow s of m aterial and inform ation
betw een them
4. Gather data
• Identify resources for each task and flow
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 37
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 38
Administrative Process Value
Stream Map - Current State
Process Steps:
56
Handoffs:
52
Cycle Time:
60 days
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 39
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 40
Keys for Success with VSM
Follow the Process
• Remember that value stream mapping & analysis is
a process
• Avoid short-cuts…the steps are important!
• Remind yourself and your team to be disciplined
Learn by Doing!
"We can skip this step"
"We already know how we This
want to make this"
"Let's not worry about that
Process
for now" Works!!
ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 41
ESD.61J / 16.852J: Integrating the Lean Enterprise © Deborah Nightingale, 2005 Massachusetts Institute of Technology Page 42
The Goal is to Eliminate Waste
Types of Waste
• Defects
• Over Production
• Transportation
• Movement
• Waiting
• Inventory
• Over Processing
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 43
ESD.61J / 16.852J: Integrat ing the Lean Enterprise © Deborah N ight ingale, 2005 Massachusetts Inst itute of Technology Page 44
Some General Product Definition Wastes
• Inaccurate / Incom plete
Inform ation
• Inadequate Analysis
• Generating More Info
• Requirem ents Creep
Than Required
• Task to Be • Change / Multiple Tools
• Excessive Iterations,
Accom plished • Inadequate Testing
Don ’t Stop at Good
(New , In-w ork,
Enough
etc.)
Making Defective Products • Fine Tuning Beyond
• Undocum ented
(Rew ork ) Required
Inform ation
Products Do Not • Over Designing
• Prioritization
Inventories • Unnecessary Interim
• Too Much M eet Customer
Draw ings for Build
Inform ation M ore WIP Than Requirements
Over Processing • Over Analysis
the Absolute • Excessive Test Points
• Required to Stop a M inimum Doing M ore Than Is
Given Task Due to • Duplicate Tasking
Necessary
Unavailable,
Inaccurate, And/or Waiting Seven
Late Inform ation Delay From Previous Types of
• Jobs in Queue Processing Steps Waste Over Production
Waiting for
M aking Ahead of
Resources
Demand
• Setup Tim e Movem ent
(Com puter Logon, Unnecessary • Tasks Finished
Printers, Xerox,
M ovement of People Transportation Before Required,
etc.)
During the Course Unnecessary Transport e.g. Making
of Their Work of M aterials Draw ings Before
• Access to Data Storage They Are Needed
• People Are Not Co-located
• Walk to Tools (Printer, Copier,
• Transferring Data From One
CADAM, Etc.)
Database to Another
• Hand Carry Product for Signatures
• Physical Movem ent of Product
• Travel to Meetings
• Unnecessary Movem ent of Data
Deborah Ni ghtingale © 2002 Massachusetts Institute of Technology 45
(Physical or Electron Flow s )
Making Defective
Products ( Rew ork )
Products Do Not
Inventories M eet Customer
M ore WIP Than Requirements
the Absolute Over Processing
M inimum Doing M ore Than Is
Necessary
Waiting Seven
Delay From Previous Types of
Processing Steps Waste Over Production
M aking Ahead of
Demand
Movem ent
Unnecessary
M ovement of People Transportation
During the Course Unnecessary Transport
of Their Work of M aterials