Lean Manufacturing

Objectives

Review brief history of manufacturing systems

Distinguish between mass and lean manufacturing
Introduce key Concepts of
Lean Manufacturing
Review the kinds of changes needed to be
considered a lean manufacturer.
Craft Manufacturing
Late 1800s
Car built on blocks in the barn as workers walked
around the car.
Built by craftsmen with pride
Components hand-crafted, hand-fitted
Excellent quality
Very expensive
Few produced
Mass Manufacturing
Assembly line - Henry Ford 1920s
Low skilled labor, simplistic jobs,
no pride in work
Interchangeable parts
Lower quality
Affordably priced for the average family
Billions produced - identical
Lean Manufacturing
Cells or flexible assembly lines
Broader jobs, highly skilled
workers, proud of product
Interchangeable parts,
even more variety
Excellent quality mandatory
Costs being decreased through process improvements.
Global markets and competition.
Inventory Turns
Manufacturing and Automotive
25

20
Automotive
15

10

5
Manufacturing

0
77 79 81 83 85 87 89 91 93 95 97 99

Source US Department of Commerce, Bureau of Economic Analysis

Definition of Lean

Half the hours of human effort in the factory

Half the defects in the finished product
One-third the hours of engineering effort
Half the factory space for the same output
A tenth or less of in-process inventories

Source: The Machine that Changed the World

Womack, Jones, Roos 1990
 Lean is a System strategy.
Successful implementation is in the Details.
DEFINING LEAN (OR ONE PIECE FLOW, OR JIT, OR ..)

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

ANOTHER DEFINITION

A manufacturing philosophy that shortens the time

line between the customer order and the shipment by
eliminating waste (non-value-adding activities).
DEFINITION OF VALUE ADDED

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.)
Toyota Production System
Best Quality - Lowest Cost - Shortest Lead Time
Through shortening the Production Flow by Eliminating Waste

Just in Time Jidoka

The right part Built in Quality
at the right time
in the right amount Manual / Automatic
Line Stop
Labor-Machine
Continuous Flow Efficiency
Pull System Error Proofing
Level Production Visual Control
(Heijunka) Flexible, Capable,
Highly Motivated
People

Standardized Work
Operational Stability Robust Products & Processes
Total Productive Maintenance Supplier Involvement
Lean Thinking
The Fundamental Insight & Objective:

Shift the focus of management from existing

organization, technologies, and assets to the
product!

Differentiate value from waste (muda)

Enhance value and remove waste by looking

down, not up!!!
Lean Thinking Principles

Accurately specify value by product

Identify the value stream

Make the product flow

At the pull of the customer

In pursuit of perfection
Value Stream Mapping
 Value Stream Mapping

Visual Tool to Help See and Understand the Flow

Of Material and Information

Business as usual

Process, Process, Process,

activity, or activity, or activity, or
function function function

Value Stream Approach

Process, Process, Process,

activity, or activity, or activity, or
function function function
 Value Stream Mapping

Visual Tool to Help See and Understand the Flow

Of Material and Information

Levels of Mapping
Process Level
Responsibility Center (RC), Manufacturing
Business Unit (MBU), or single plant Begin here
Multiple plants
Across companies
 Value Stream Mapping

Visual Tool to Help See and Understand the Flow

Of Material and Information

Value Stream Mapping Process

Product Family Choose Product Family

Current State Drawing Understand how the area

currently operates

Future State Drawing Design a lean flow

Repeat

Work Plan & Plan how to get there and

Implementation execute the plan
A Value Stream is the set of all actions (both
value added and non value added)
required to bring a specific product or
service from raw material through to the
customer.
 Value Stream Improvement vs.
Process Improvement
Value Stream
Process Process Process
Customer
Assembly
Stamping Welding
Cell

Raw Finished
Material Product
 Value Stream Mapping

A method to look at the production process to produce

your product
Maps production flow and information flow
All levels,
not just individual processes
include your customers and vendors
 Why use it?

Visualize and expose,

If you cant see something how can you improve it
Identifies waste and their sources
Opens up communication
Creates a blue print for the future
the ideal
 How does it work

Create the current state map

Create the future state map Ideal
Identify and minimize wastes
 First Things First

Educate and Communicate

Remove fear, but create sense urgency
Clean up, 5S
Sort, Set in Order, Shine, Standardize, Sustain
Continued...
Start small, look only in your own building
Bring in vendors and customers later
stay realistic
Choose one product line that is typical of something
you produce
Choose a lean - value stream manager
Vocabulary
Cycle Time (C/T), Value Added Time
Changeover Time (C/O)
# of Operators
Inventory (how much, how long it sits)
Lead Time
Available Work Time (Up time)
Takt Time
(Available Time / Cust. Demand)
 Value Stream Mapping

Visual Tool to Help See and Understand the Flow

Of Material and Information

Material Flow Icons:

C/T=45 min
Assembly C/O=30 min
XYZ
3 Shifts.
Corporation
Process Supplier/
2% Scrap I 5
Box Customer Data Box Inventory Supermarket

Mon
+ Wed
FIFO
Push Material Flow to
Physical Customer or From First-In
Shipment Pull Supplier First-Out
 Value Stream Mapping

Visual Tool to Help See and Understand the Flow

Of Material and Information

Information Flow Icons:

Weekly
Schedule OXOX
Manual
Information Electronic Load
Flow Information Flow Information Leveling Box
Box

Ordinary Transport Signal Kanban

Kanban or Purchase Kanban Post
Kanban
 Value Stream Mapping

Visual Tool to Help See and Understand the Flow

Of Material and Information

General Icons:

Uptime

Changeover

Kaizen Buffer or
Operator Lightning Burst Safety Stock
Information For A Process Data Box to be
collected on the shop floor)
Cycle time
Changeover time
Process reliability (uptime)
Scrap/Rework/Defect rate
Number of product variations
Number of operators
Production batch sizes
Working time (minus breaks)
Pack size
Typical Steps to Complete a Current
State Drawing
Document customer information
Complete a quick walk through to identify the main
processes (i.e., how many process boxes)
Fill in data boxes, draw inventory triangles, and count
inventory
Document supplier information
Establish information flow: how does each process
know what to make next?
Identify where material is being pushed
Quantify production leadtime vs. processing time
Make to Order and Engineer to Order Shops

Many shops have a combination of repetitive and non-

repetitive products (indicating product families)
Product families might be difficult to see focus on
machines/operations and work content time
Engineering might be included in the information flow for
leadtime impact, etc.
Pitch is typically arbitrary to the manager
Employment of pitch requires detailed knowledge of work
content and routings for jobs
Distribution Centers Example

(Information flow on top)

RECEIVE STOCK PICK PACK SHIP

I I I I I
Parallel Manufacturing Flows

Keep it simple, and make sure to leave room for the

data boxes!
Including Subassemblies

Focus on major subassemblies first

Select one or two which might represent different
types of situations
Generic vs. specific to the product family
Outsourced tasks within assembly
Follow the format for parallel flow, and always
include the main assembly process!
For large fabricating and assembly operations,
consider maps for each major subassembly with a
macro map indicating the entire product family
Do We Really Have a
Supermarket (or FIFO lane)?

Supermarkets (and FIFO lanes) control production

between points of flow without a written schedule.
What is the trigger for production in this area of the value stream?
Is the upstream process overproducing?
If there is a scheduling system present outside of a
pure pull, chances are that there is no supermarket.
Outsourcing

Mon XYZ Mon

+ Wed Corporation + Wed
I I
300 pieces C/T = 1 hour 100 pieces

L/T = 3 days
Batch =
Min. Batch =

2 days 3 Days .7 days

60 min.
Long Processing Times vs.
Production Leadtimes

CURE
I I
300 pieces 100 pieces

C/T = 8 hours
C/O = 25 min.
Rel. = 100%
Batch = 100 pcs.

3 days 8 hours 1 day

8 hours
Cycle Times vs. Work Content
Work content is important to understand costs and in
balancing flow
Consider all machine and manual work content, regardless of
the cycle time
Accumulate all parallel operations in the processing timeline

ASSEMBLY

=5 Cycle Time = 30 sec

Work Content 150 sec.
C/T = 30 sec.
C/O = 25 min.
Different Changeover & Cycle
Times, etc.

Current state mapping might uncover:

Several different machines performing the same operation
Different products within the family with different data box
characteristics for a specific process
Capture the range of values as opposed to an average
value
Mapping Final Inspection/
Repair/Rework

Judgment counts!
Minimal repair/rework might be captured as a data
attribute at the final step.
If nearly every part needs assessment or extra work,
consider a separate process box.
Supplier Data Boxes
Data attributes are dependent on the value stream
and supplier. Minimum information might include:

XYZ
Supplier

L/T = 3 weeks

Batch = 3 Tons

Min. Batch = 2T

2% Scrap
Pull Within an MRP
Environment

A combination push and pull is usually just a push

system!
Multiple production triggers typically lead to
overproduction.
Assemble-to-Order Options in a
Future State

Finished goods supermarkets can be expensive in

value streams which have many finished part numbers
within a product family
To minimize inventory costs, try to find the upstream
location where the value stream has very few
variations and consider a supermarket of WIP at that
point.
Customers orders can drop to this location, with FIFO
lanes controlling production into shipping.
: Assemble-to-Order Options in
a Future State

Customer
Orders

OXOX

CUT max 20 pieces ASSEMBLE max 20 pieces SHIP

FIFO FIFO
Why Not Just Start Pulling
Tomorrow?

Initiating a pull system without first attempting to flow

will result in lots of supermarkets, and may increase
your inventory levels.
Design your future state with the following sequence:
Flow wherever you can (while still pushing)
Produce to the TAKT (while still pushing)
Implement a pull system
Administrative Mapping: Part 1:
Integrated

Include functions such as engineering, purchasing, and

order entry for product families which have routine
activities prior to scheduling
Place the process boxes between the customer and
the scheduling function
Minimize the data collection to the basics of cycle time
or quality, and document the impact on leadtime
Administrative Mapping: Part 2:
Separate Maps

Better for redesigning overhead and administrative support

areas touching value streams
Order processing
Warranty activities
Job quotes
Not useful for activities outside a value stream
Data boxes must have attributes focusing on cost, quality,
and service
Inventory is typically paperwork
Information flow is typically informal
 Get Started

Create a current state map

Dont get bogged down in details stay at the single plant
level,
Time line 1-2 days
Map up stream
Current State Map
Production Control
Raw Material Customer
Supplier
MRP 9200/shift
500 ft coil Daily Order Daily Order Lot: 20

Daily Ship
Schedule

Stamping Welding Assy #1 Assy #2 Shipping

I I I I I
500ft C/T: 1s 4600 C/T: 46s 1100 C/T: 62s 1600 C/T: 40s 2700 Staging
C/O: 1 hr C/O: 10 m C/O: 0 C/O: 0
Oper: 1 Oper: 1 Oper: 1 Oper: 1
Uptime: Uptime: Uptime: Uptime:
85% 100% 80% 100%
Shifts: 2 Shifts: 2 Shifts: 2 Shifts: 2
27,600s 27,600s 27,600s 27,600s

23.6 Days
5 Days 8.4 Days 2.7 Days 2 Days 4.5 Days
149 sec

1 sec 46 sec 2 sec 40 sec

6

(Figure adopted from Learning to See, Value Stream Mapping. by Rother and Shook, 1999)
 Find Your Takt Time:

Available Time
8hr shift - breaks = 27,600 sec
Customer Demand
9200 units /20 lot = 460 lots/shift
Takt Time
Available time/Customer Demand
27,600/460 = 60 seconds
Continous Flow
Welding Assy #1 Assy #2
I I I I
4600 C/T: 46s 1100 C/T: 62s 1600 C/T: 40s 2700
C/O: 10 m C/O: 0 C/O: 0
Oper: 1 Oper: 1 Oper: 1
Uptime: Uptime: Uptime:
100% 80% 100%
Shifts: 2 Shifts: 2 Shifts: 2
27,600s 27,600s 27,600s

Current

Weld & Assy

Takt: 60s
C/T: 48s
C/O: 0
Layout
Oper: 3
uptime:
100%
Shifts:2
Setup
27,600s 2 Bins
20 units/ bin
Cross Training
Future
Card System
Stamping Weld & Assy
I I
500ft C/T: 1s 4600 Takt: 60s
C/O: 1 hr C/T: 56s
Oper: 1 C/O: 0
Uptime: Oper: 3
85% uptime:
Shifts: 2 100%
27,600s Shifts:2
27,600s

Current

Stamping Weld & Assy Shipping

Takt: 60s Takt: 60s Staging

C/T: 56s C/T: 48s
C/O: 0 C/O: 0
Oper: 1 Oper: 3
uptime:
100%
Shifts:2
27,600s

Future
Future State
Map
Production Control

Daily Order Daily Order

Customer
Raw Material
Supplier 9200/shift
Lot: 20
Daily Orders

Stamping Weld & Assy Shipping

Takt: 60s Takt: 60s Staging

C/T: 48s C/T: 48s
C/O: 10m C/O: 0
Oper: 1 Oper: 3
uptime:
100%
Shifts:2
27,600s

Future Current

1.5 Days 1 Day 2 Days 4.5 Days 23.6 Days

145 sec 148 sec

1 sec 144 sec

(Figure adopted from Learning to See, Value Stream Mapping. by Rother and Shook, 1999)
Value Stream Management:
Step by Step
Designate a value stream manager

Identify the value stream &

remove wasted actions (muda)

Make the product flow

So the customer can pull

By managing toward perfection

Always repeat the principles as you start,
to avoid focus on isolated techniques!
The Current State

We call this completed map the current state

It shows what is really happening right now

Rigorous definition of product families and identification of

wasteful steps provides opportunity to envision a future
state
The Future State

In implementing a future state we always:

Specify a short time frame to institute and stabilize it --

Three months is often the best within plants

Imagine how to remove wasted steps, get remaining

steps to flow, and let the customer pull
Flow

Line up all of the steps that truly create

value so they occur in a rapid sequence

Requires that every step in the process be:

Capable right every time (6 Sigma)
Available always able to run (TPM)
Adequate with capacity to avoid bottlenecks
(right-sized tools)
Flow The Cell as the Ideal!
Raw
Materials
Piece
Part
Molding
Customer
Paint
Component
Assembly Assembly
Retail
Final
Assembly
Distribution
Pull - The Continuing Need!

Batch
tote 20 20
Customer

Action B Action A X0X0

SHIPPING
MALAYSIA
Macro Future State DEARBORN

Material

Info via
MRP

NORFOLK Info via

Pull
signal LIVONIA

Wiper
Module EDISON
plant

BOX SCORE FOR WIPER ARM/BLADE VALUE SREAM (BURTON TO EDISON ONLY):
TOTAL STEPS: 20; VALUE CREATING STEPS: 8; TOTAL TIME: 2 DAYS; VALUE CREATING TIME: 21 MIN
VSMs Dont Just Avoid
Variances

Plan

Actual
They Manage Toward
Perfection
Next Future State

Future State

Current State Original State

VSM Is Nothing New:
Highland Park, 1914
Running
Commutators Front Axles
Boards

Assembly

Radiators Gas tanks Rear Axles

250,000 Vehicles Per Year, One Model

But We Lost Our Way:
The Rouge
Annealing Stamping Painting

Assembly

Washing Welding Brazing

2.5 Million Vehicle Kits Per Year, Many Models

Totally Lost: Spaghetti World

Assembly Components Piece Parts Process

Modular Production with VSM
Moldings Gaskets Wiper
Brakes Dashboards Modules

Assembly

Fuel
Seats Glass
Systems Tubes Screws

250,000 Units Per Year, 5 Models, Five Days!

66
 Sr.
Mgmt.

Flow Kaizen
VALUE STREAM
IMPROVEMENT

Process Kaizen
ELIMINATION OF
WASTE

Front
Lines
FOCUS
Lean Path for a Second Leap:

Weve recently been conducting many of these

macro-mapping exercises at LEI

They clearly show enormous waste in production &

distribution systems after first lean leap

Waste is the bank for higher margins, share prices, and

wages even with lower product prices

But how can you make a withdrawal?

Lean Path to the Future:
Our recommendation:
Conduct a joint mapping exercise with all the value
stream players for every product family
Identify waste/cost savings and the investments needed
to achieve the savings
Devise a simple formula to divide the loot and share the
investment cost so that everyone wins!

The one sure way to create

a win-win-win
Canadian automotive industry!
?