Implementing

Lean Scheduling &

Kanban
 Speaker Introduction

Jason P. Premo: VP of nMetric - Software

y Scheduling & Manufacturing
Execution (MES) Software
y ERP to Shop Floor Control
10+ yrs in manufacturing
y Engineer to VP Operations
y Mid-Market to Fortune 500
y Printing, Packaging, CPG
Lean Champion
y Kaizen, 6σ Black Belt, MBNQA
y 40+ events in 5 countries
2
 Discussion Topics

Today’s Agenda:
1. Supply Chain Reality
2. Step 1: Pull Prerequisites
3. Step 2: Know Your P’s & Q’s
4. Step 3: Make the Move to Cellular
5. Step 4: Kanban Baby Steps
6. Step 5: Leverage Lean Technology
7. Question and Answer
3
 Discussion Topics

Today’s Agenda:
1. Supply Chain Reality
2. Step 1: Pull Prerequisites
3. Step 2: Know Your P’s & Q’s
4. Step 3: Make the Move to Cellular
5. Step 4: Kanban Baby Steps
6. Step 5: Leverage Lean Technology
7. Question and Answer
4
 Supply Chain Reality

Competition (Jason’s Example):

$14 is the average wage…
y Per hour in my USA facilities
y Per day in my Mexico plant
y Per week at my Chinese competitor
It’s tough to be the low-cost producer
y NA facilities start with a 22% cost disadvantage
We can become the high-value supplier!
y What methods can we use to be competitive?
5
 Supply Chain Reality

Opportunities for Waste?

Wholesale
Suppliers
Distributors Retailers
Manufacturers

Supplier
Exchanges Customers
Logistics
Exchanges Customer
Exchanges

Virtual
Manufacturers
Contract Logistics
Manufacturer Providers

6
 Supply Chain Reality

Lean Flow’s Competitive Edge:

Tradional Phase I Toyota 'Lean'
Batch
Batch
Improving
Flow
Lean Flow
System
Customer
Lead Time 30-90 Days 5 - 60 Days 1 Day

Customer
Quality Rate 10,000PPM 1,000PPM 100PPM

Inventory
Turnover 3-5 Turns 10+Turns 30-50 Turns

Productivity 1X 2X 4X

Profit abilit y Ordinary Im proving 2% m argin

per Yr. 7
 Discussion Topics

Today’s Agenda:
1. Supply Chain Reality
2. Step 1: Pull Prerequisites
3. Step 2: Know Your P’s & Q’s
4. Step 3: Make the Move to Cellular
5. Step 4: Kanban Baby Steps
6. Step 5: Leverage Lean Technology
7. Question and Answer
8
 Pull Prerequisites

Build a Pull Foundation:

1. Meaningful Measurements

2. Future State Vision (Value Stream)

3. 5S Workplace Organization

4. Multi-Skilled Workforce

5. Quick Changeover 9
 Pull Prerequisites

Meaningful Measurements:
Quantifies the “value-
% UPTIME add” of equipment
%
Y
y Uptime, Yield, Efficiency
I It measures the time
E
L
OEE equipment in a factory is
D actually making quality
PROCESS product when compared
EFFICIENCY
to maximum
y Reduce the 6 big losses
%uptime x %yield x %efficiency
10
44.8% uptime x 90% yield x 70% efficiency = 28% OEE!
 Pull Prerequisites

OEE & The Six Big Losses:

11
 Pull Prerequisites

Value Stream Example:

Forecast Production Forecast
Control Customer
Supplier Fax EDI Order
Weekly 2x week
Daily
Schedule
Raw Finished
Material Goods

CNC Drill
KAIZEN! Pack
I I I I
KAIZEN!
100 200 250 500
610 s
180 sec 270 sec 160 sec
10 days 4 days 3 days 8 days 2412d
 Pull Prerequisites

Can You Find the Bottleneck?

CNC Drill Pack

Uptime 85% Uptime 85% Uptime 90%

Cycle 15 sec Cycle 15 sec Cycle 15 sec

P Time 30 sec P Time 30 sec P Time 30 sec

Setup 60 min Setup 60 min Setup 60 min

13
 Pull Prerequisites

How About Now?

CNC Drill Pack

Uptime 85% Uptime 85% Uptime 90%

Cycle 15 sec Cycle 15 sec Cycle 15 sec

P Time 30 sec P Time 30 sec P Time 30 sec

Setup 60 min Setup 60 min Setup 60 min

14
 Pull Prerequisites

Understanding Variation:
Variation or “spread” of
landing positions

X X X
X X
X X
X X

Average or “mean” location

of all touchdowns
15
 Pull Prerequisites

Understanding Variation – Part 2:

But…Smaller “spread” or
variation of touchdowns

XXX
XX X
X X
X
Notice it has the
same average!
So…which pilot would
you choose for your
next flight? Why? 16
 Pull Prerequisites

Bring Those Metrics to Life:

Production
Control Customer
Supplier 99%
97%
Weekly
Schedule 91%
82%

610 s
CNC Drill Pack
I I I I 24 d
10 days 180 sec 4 days 270 sec 8 days 160 sec 3 days
17
 Pull Prerequisites

5S Workplace Organization:
1 Seiri Sort - Clear out non-essentials
2 Seiton Set in Order - Configure Workplace
3 Seiso Shine - Clean the environment
4 Seiketsu Standardize - Define the routines
5 Shitsuke Sustain - Comply to the Standard

“A place for everything and

everything in it’s place” 18
 Pull Prerequisites

5S “Set-in-Order” Example:

19
 Pull Prerequisites

Employee Skills Development:

20
 Pull Prerequisites

Setups Significantly Impact Lean:

Running a Batch with a Set-Up time of 50 min:
S/U Run 400 min

Without addressing set up time in today’s JIT world…

Run 80 Run 80 Run 80 Run 80 Run 80
S/U S/U S/U S/U S/U
min min min min min

What if set up time is reduced to 10 min?

Run 80 Run 80 Run 80 Run 80 Run 80
min min min min min
21
 Pull Prerequisites

Quick Change Implementation:

Phase One Observe (video tape) the setup
and analyze process steps

Separate internal and external

Phase Two processes in the setup

Convert internal elements to external

Phase Three whenever possible

Streamline, Eliminate, Reduce all

Phase Four other aspects of the setup process
22
 Pull Prerequisites

Using a “Jig”
Eliminate Adjustments: to help set the
anvil clearance!

23
 Discussion Topics

Today’s Agenda:
1. Supply Chain Reality
2. Step 1: Pull Prerequisites
3. Step 2: Know Your P’s & Q’s
4. Step 3: Make the Move to Cellular
5. Step 4: Kanban Baby Steps
6. Step 5: Leverage Lean Technology
7. Question and Answer
24
 P’s & Q’s

Product-Quantity Analysis:
“P” stands for product & “Q” for quantity
Arranges quantities of products according
to their destinations (the clients)
y Not to be confused with ABC Analysis
Graphical table of client-specific quantity
y Compile statistics from past 6 months
y Include Customer, Product Type, Annual Qty
y Also include # of lots & Avg. # of units per lot

25
 P’s & Q’s

P-Q Analysis Example:

Annual Avg Order Cumul
Customer - Product Type Lot Size Quantity Quantity Percent
A - T1 12 2800 250 19%
A - T2 6 2400 423 35%
B - T1 10 1800 185 47%
B - T3 20 1500 82 57%
C - T1 15 1500 120 67%
C - T3 8 1400 224 76%
D - T1 12 1000 97 83%
D - T3 10 800 80 88%
B - T2 12 600 55 92%
C - T2 5 500 110 96%
A - T3 10 450 48 99%
D - T2 10 200 22 100%
Total 14950 26
 P’s & Q’s

P-Q Graph Example:

PQ Analysis Chart

3000 120%
A
2500 100%

Cumulative Percent
2000 80%
Quantity

1500 B 60%

C
1000 40%

500 20%

0 0%
1

3
1

2
-T

-T

-T
-T

-T

-T

-T

-T

-T

-T

-T

-T
C

D
A

A
Customer - Product Type 27
Annual Quantity Avg Order Quantity Cumul Percent
 P’s & Q’s

Graph 4-6 Line:

PQ Analysis Chart

3000 120%

A
2500 100%

Cumulative Percent
2000 80%
Quantity

1500 B 60%

1000
C 40%

500 20%

0 0%
1

3
1

2
-T

-T

-T
-T

-T

-T

-T

-T

-T

-T

-T

-T
C

D
A

A
Customer - Product Type
28
Annual Quantity Avg Order Quantity Cumul Percent
 P’s & Q’s

Analyze Results:
Graph 4-6 Line (40% p-axis, 60% q-axis)
y Ex: 10 items on p-axis (10x 40% = 4)
y Line from P-axis #4 to Q-axis intersection
y Where (what quantity) does it intersect?
Validate Wide-Variety / High Volume
y Note that Q-axis intersection IS 60%!
y 40% is 57% of plant’s volume (close enough)
y A good candidate for cell production
29
 Discussion Topics

Today’s Agenda:
1. Supply Chain Reality
2. Step 1: Pull Prerequisites
3. Step 2: Know Your P’s & Q’s
4. Step 3: Make the Move to Cellular
5. Step 4: Kanban Baby Steps
6. Step 5: Leverage Lean Technology
7. Question and Answer
30
 Cellular Manufacturing

Wide Variety & Small Lot Impact:

Variety continues to increase while
production/customer lot size decreases
Often leads to complicated plant layouts
and product-process flows
Result is a rise in waste due to poor
management of flow and inventory “piles”
“Domino” effect causes inability to spot
defect causes, cycle time delays, etc.
31
 Cellular Manufacturing

Traditional Process Layout:

Lathe Milling Drilling

L L M M D D

D D
L L M M
Grinding

L L M M G G

Assembly
L L G G
A A

Receiving and A A G G
Shipping 32
 Cellular Manufacturing

Implementation Sequence:
1. Focus on “A” Items

2. Part-Specific Process Routings

3. Identify Categories or Families

4. Capacity and Takt Time Analysis

5. Design and Standardize Work Cell 33

 Cellular Manufacturing

Process Routing Example:

34
 Cellular Manufacturing

Product “Family” Example:

35
 Cellular Manufacturing

Takt Time (Pace):

Time (Available seconds per working day)

Takt Time =
Volume (Daily production requirement)

Sets pace or “beat” of production

to match pace of sales.

Actual time required for a worker to

Cycle Time =
complete one cycle of his process 36
 Cellular Manufacturing

Operating Time Example:

Net Operating Time/Shift = 480 min
Lunch = 30 min
Meeting = 5 min
5S Cleanup = 10 min
Net Operating Time/shift = 435 min / shift
= 7.25 hr / shift
Available Time (3 shifts) = 108.75 hrs/ wk
37
 Cellular Manufacturing

Part-Process Capacity Analysis:

38
 Cellular Manufacturing

Part 6060 Example:

Time Required = 1550 units/wk = 29.34 hr
383/shift x 7.25hr/shift
Takt Time = Weekly Operating Time
Weekly Customer Requirement
= (29.34 hrs) x (3600 sec/hr)
1550 parts
= 68 seconds per parts 39
 Cellular Manufacturing

Operator Staffing:

40
 Cellular Manufacturing

Operator Staffing:

Operators = Total Manual Time

Takt Time

Operators = 113 seconds

68 seconds
= 1.66 or 2 operators needed
41
 Cellular Manufacturing

Operator Capacity Analysis:

42
 Cellular Manufacturing

Balancing Operator Load:

Takt Time (1 min.)
1 min.

Cycle Time

Operators A B C D E
Takt Time (1 min.)
1 min.

Operators A B C D E 43
 Cellular Manufacturing

Work Sequence/Combination:

44
 Cellular Manufacturing

Work Sequencing:

45
 Discussion Topics

Today’s Agenda:
1. Supply Chain Reality
2. Step 1: Pull Prerequisites
3. Step 2: Know Your P’s & Q’s
4. Step 3: Make the Move to Cellular
5. Step 4: Kanban Baby Steps
6. Step 5: Leverage Lean Technology
7. Question and Answer
46
 Kanban

Defining Kanban:
Traditionally a manual information
system to signal and control production
y Also material transportation, inventory, etc
y Literally means “visible record” or card/signal
y Communication from a downstream process
(customer) to a upstream process (producer)

47
 Kanban

Two Critical Kanbans:

Production kanban
y “P- Kanban”
y authorizes production of a
fixed amount of product
Transportation kanban
y “T- Kanban”
y authorizes transporting a
fixed amount of product or
material downstream 48
 Kanban

Kanban Card Example:

49
 Kanban

Implementing Kanban:
1. Identify Parts & Components

2. Establish Supermarkets & Signals

3. Calculate Kanbans & Containers

4. Heijunka Level Load Schedule

5. Expand to other Parts / Processes 50

 Kanban

Part – Component BOM example:

51
 Kanban

Part Usage & Kanban Sizing:

52
 Kanban

Supermarkets & Kanban:

Production Kanban
Withdrawal Kanban
A
B
C
D
E
F
G
H
Upstream I
J
Downstream
Pull
Processes K
L
Processes
New M
Product N
O
P
Q
Needed
Store Product

Downstream processes withdraw what they need when

they need it….Upstream processes replenish what is 53
taken away.
 Kanban

Calculating Kanbans:
Kanban Quantity = A x B x C
A = Weekly parts usage
B = Supplier lead time in weeks
C = Smoothing factor
y Used to compensate for part number demand
which is not uniform in weekly or monthly
usage and expressed as additional weeks or
fractions of weeks of inventory
54
 Kanban

Calculating Containers:
Kanban Qty = (183 pieces/week) x (4
weeks) x (1.0 smoothing)
= 732 pieces

# Containers = Kanban Qty

# pieces held per
= 732 pieces / 170 pcs per bin
= 4.31 containers 55
 Kanban

Kanban Container Bin Example:

56
 Kanban

Kanban Process Example

When CNC bins are
Upstream operators CNC operators pull raw empty, PO is sent to
are alerted to produce stock from supermarket supplier for restocking
& refill empty bin

When bin is empty, When bin is depleted, Local parts bin

kanban card is sent it is refilled from used in Final
upstream for refilling supermarket Assembly area

57
 Kanban

Heijunka Levelling:
Heijunka means “to make flat or level”
Demand leveling breaks down the total
volume of orders (or Kanbans) for a given
planning period (one month) into a
scheduling interval (weekly or daily).
A Heijunka calculation then defines a
production sequence for that scheduling
interval based on work cell capacity, which
dictates the model mix to be scheduled
58
 Kanban

Takt Time with Setups:

59
 Kanban

Heijunka Scheduling – Level Load:

The Heijunka schedule is put into
operation through the production and
distribution of Kanban cards or signals
for the mix of products.
By running small, even batches of
many models over short periods of
time, producers can maintain level
inventories throughout the
manufacturing process. 60
 Kanban

Heijunka Weekly Schedule:

61
 Kanban

Kanban – Heijunka Board:

62
 Discussion Topics

Today’s Agenda:
1. Supply Chain Reality
2. Step 1: Pull Prerequisites
3. Step 2: Know Your P’s & Q’s
4. Step 3: Make the Move to Cellular
5. Step 4: Kanban Baby Steps
6. Step 5: Leverage Lean Technology
7. Question and Answer
63
 Leverage Technology

Lean Workflow Challenges:

Even small unforeseen spikes in demand
can create significant disruptions when
those fluctuations amplify as they move
upstream through the supply chain – also
known as “the bullwhip effect.”
CREDIT CARD

1234 5678 9012

VALID FROM GOOD THRU
XX/XX/XX
XX/XX/XX XX/XX/XX
XX/XX/XX
PAUL FISCHER
PAUL FISCHER

Supplier Manufacturer Distribution Retailer Consumer

Demand
Demand

Demand

Demand

Demand
64
Time Time Time Time Time
 Leverage Technology

Top Floor to Shop Floor:

Business
The
Systems “Top Floor”
Boardroom

The
The Information
Information
Gap
Gap

The Shop
Plant
Systems Floor
65
 Leverage Technology

Collaborative Manufacturing:
Enterprise Legacy Wireless & Customers
Systems Applications Thin Client & Suppliers

Enterprise Layer

Collaborative Technology Platform

Operational Layer

Controls & Shop Floor Input

Operations Automation Systems Devices 66
 Leverage Technology

Real Time and Graphical Scheduling:

67
 Leverage Technology

Paperless Operations:

68
 Leverage Technology

Electronic Kanban:
Kanban
Quantity On Hand : Hours Remaining Size

Kanban Item #1: 450 : 23 500

Kanban Item #2: 100 : 2 500

Kanban Item #3: 250 : 12 500

Kanban Item #4: 450 : 23 500

Kanban Item #5: 200 : 21 250

69
 Leverage Technology

Real Time Performance Visibility:

70
 Conclusion

Take-Away:
Start with a Lean Foundation before
jumping into advanced initiatives
Create a Lean Business Plan and Roadmap
Plan, Plan, Plan – then execute!
y Products, Routings, Machine Capacity, Workcells,
Labor Balancing, Heijunka Scheduling, Kanban
Leverage Lean-Enabling Technology
y Collaborative Production Management systems can
overcome traditional hurdles and challenges of Lean
y Provide much greater visibilty and decision support 71
 Discussion Topics

Today’s Agenda:
1. Supply Chain Reality
2. Step 1: Pull Prerequisites
3. Step 2: Know Your P’s & Q’s
4. Step 3: Make the Move to Cellular
5. Step 4: Kanban Baby Steps
6. Step 5: Leverage Lean Technology
7. Question and Answer
72
Questions?

73
 Thank You!

Web: www.nMetric.com
Toll Free: 888.561.9700
Main: 714.424.4400
Email: jpremo@nMetric.com 74