ISE 251

Managing the Lean Enterprise

Improvement Program
 ISE 251 - Preliminaries
• Welcome to the course
• Green sheet
• Schedule
• Canvas
• Last day to drop for free is 9/6/17
• Last day to add 9/13/17
• Term project
• GWAR

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 ISE 251 – Course Goals
• To give the student a broad understanding of the
executive and program manager’s perspectives
on what it takes to lead a specifically designed
Lean Enterprise improvement program.
• To learn the high level methods to identify
strategic requirements, identify potential
improvement initiatives, decide which ones to
pursue, manage the execution, and monitor
results

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 ISE 251 – Course Objectives
• Distinguish between program and project
management, and show the impact a program
initiative can have on an organization
• Define business process improvement [BPI]
methods, and know how to identify a
management fad
• Explain and contrast Lean, Six Sigma,
Reengineering, Theory of Constraints in terms of
BPI methods or business operations systems
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 ISE 251 – Course Objectives
• Understand a business strategy in general terms,
and be able to apply planning tools such as SWOT
analysis, strategy maps, and balanced scorecard
[BSC]
• Link the organization’s vision, mission, and
purpose to the strategy, company values,
philosophy and ethics
• Outline a Lean business strategy in terms of
Hoshin planning, and define the associated goals,
objectives, and core capabilities needed for
success

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 ISE 251 – Course Objectives
• Define the concept of quality as it pertains to
continuous process improvement [CPI] efforts,
as well as process standardization
• Recognize the importance of organizational
learning
• Identify Lean metrics and explain how specific
Lean tools can drive organizational
performance

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 ISE 251 – Course Objectives
• Apply benchmarking, and know how to assess
a baseline activity, function, or operation
• Explain the financial impact of embarking on
an improvement program, and be able to
quantify the impact in the long or short term
time frame
• Identify the attributes of high-performance,
self-directed teams

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 ISE 251 – Course Objectives
• Explain how to interpret the Voice of the
Customer [VOC], and how quality function
deployment [QFD] relates to the VOC
• Discuss the importance of organizational
change, change readiness, and how to sustain
change
• Clarify the role leadership plays in
implementing and sustaining a successful
program initiative

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 ISE 251 – Course Project Teams
• Please sign in on the sheet, exchange contact
information with your team, to set up the Canvas
site, and form teams of 4 for the course project.
• The team will also be responsible for the course
project, topics to be agreed to by the instructor.
• Submissions are due on October 10, 2017
• Plan on a process that can be completed in four
weeks from assessment to implementation to
report. No “case study” projects are permitted
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 ISE 251 - Preliminaries
• Canvas
• Course materials will be posted on the ISE 251
file within Canvas
• Login information is the same as for SJSUOne.
• Assignments have turnitin.com enabled so
please do not assume you can lift passages
from sources without attribution. I will find
out and consequences shall be severe.

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 ISE 251 - Preliminaries
• Graduate Writing Assessment Report
• In accordance with the specifics laid out in the
green sheet, the course has a ten-page paper that
serves as the graduate writing assessment to
parallel the Engineering 200W class. This
assignment will be graded by the technical
writing professors (e.g. not by me) and any
appeals or disputes will go to them. The specific
assignment will be determined later.
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 ISE 251 – A General Note
• One thing every student in this class needs to
remember:
• You are here because we consider you capable
of handling the challenges we will present to
you in this course. If we didn’t think you could
handle these challenges, you would not be
here. Remember that you have the talent, so
follow through by using your skills.

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 ISE 251 – Fundamentals of
Management
• Management comes from the Italian verb
maneggiare, to handle.
• As such, it was applied to situations where
control or direction was exercised.
• It is now expanded into a descriptive term,
such as waste or figure management,
although in terms of the “handling” and
“direction” aspects it is relevant if not the best
choice of word

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 ISE 251 – Fundamentals of Management

• Flowchart

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 ISE 251 – Fundamentals of
Management
• Management Uses [according to McFarland]
1. Organizational or administrative process
2. Group running an organization
3. Occupational career
4. A science, discipline or art
• No one style or type, but the functions
performed by the management are necessary to
the effective performance by the team
• The number of levels depend on the company
and its culture – top, middle, first line managers

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 ISE 251 – Fundamentals of
Management
• Management Levels
• First-Line – direct supervision of non-managers,
responsible for carrying out the plans and
objectives of their team, using the resources
provided by their supervision.
• Typically the lead, foreman, or lab supervisor,
they generally operate in the short-term time
frame, and can feel squeezed by situations where
they perceive an imbalance between resources,
authority, and what they are held responsible for.
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 ISE 251 – Fundamentals of
Management
• Management Levels, continued
• Middle Managers – are typically an indirect
manager [supervising first-line managers] who
will typically set sights on the intermediate term
to achieve the long-range goals set by their
supervision, set the policies for their teams, and
coordinate the various first-line groups [whether
by supervision or negotiation] to keep in line with
the long-range vision.

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 ISE 251 – Fundamentals of
Management
• Management Levels, continued
• Top Management – are responsible for
defining the operation’s character, mission,
and objectives. While they will report to the
Board of Directors [if any] they are the top
level. They will establish criteria and long
term plans [whether documented or not]
• They frequently become the “face” of their
operations.

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 ISE 251 – Fundamentals of
Management
• Managerial Skills [from Katz]
• Technical – typically practiced by the group
under supervision. Good managers know
their business
• Interpersonal – the ability to get along with
peers, subordinates, and supervisors
• Conceptual – the ability to discern critical
factors that mean success or failure.

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 ISE 251 – Fundamentals of
Management
• Graphically, the levels of skill on the various levels
can be shown by the following:
First-Line Middle Top-level

Technical

Interpersonal

Conceptual
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 ISE 251 – Fundamentals of
Management
• Managerial Roles [Mintzberg]
• Interpersonal – figurehead, leader, liaison
• Informational – monitor, disseminator,
spokesperson
• Decisional – entrepreneurial, resource allocator,
mediator, negotiator
Mintzberg also covers six organizational structures,
six mechanisms to coordinate between tasks, and
six basic parts to the organization.

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 ISE 251 – Fundamentals of
Management
• Managerial Roles – Interpersonal
• Figurehead – involves the ceremonial [welcoming
VIPs] or legal actions [SEC filings] and signing the
official documents; mostly interfacing outward.
• Leader – the downward relationship of selecting,
guiding, and motivating subordinates.
• Liaison – the horizontal relationships, to peers
and networks.

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 ISE 251 – Fundamentals of
Management
• Managerial Roles – Informational
• Monitor – information flows to the manager as it
is collected about the operation’s activities
• Disseminator – transmits information internally
to subordinates, to ensure everyone has the
information needed to succeed.
• Spokesperson – information is broadcast
externally to the press, public, or external
stakeholders [regulatory, partners, etc.]
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 ISE 251 – Fundamentals of
Management
• Managerial Roles – Decisional
• Entrepreneurial – initiating change, addressing
risk, transforming ideas to products
• Disturbance Handler – handles the crises and
problems that inevitably arise, using appropriate
tools
• Resource Allocator – handles the purse strings,
for money and resources
• Negotiator – handles the bargaining to get the
best deal for the operation, through all steps
[SIPOC]
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 ISE 251 – Fundamentals of
Management
• Managerial Functions
• Planning – selecting the mission, tools, objectives, and
actions leading to decision making
• Organizing – establishing the structure by which the
operation will run
 Staffing – keeping the organizational structure filled
with competent people
• Leading – influencing people to support the
operational goals and carry out the plan
• Controlling – measurement and feedback of
subordinate activities to keep them on plan

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 ISE 251 – Lean Thinking Overview
• Developed by Toyota, it is the policy where
any activity not related to the production of
product is removed. Value-Added is a term to
know.
• It does not sacrifice quality, since remaking
product is by definition waste, but is
dedicated to preserving value with less work
• Waste, uneven process flow, and other
inefficiencies are targeted for removal

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 ISE 251 – Lean Thinking Overview
• Some of the tools used in this removal of
wastes [not exhaustive]:
• Poka Yoke
• Standardization
• Just-in-time
• Pull [Kanban] systems and production leveling
• 5-S and the visual factory
• Value Stream Mapping

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 ISE 251 – History of Lean
Manufacturing
• The concept of removing production waste goes
back a long time
• Poor Richard's Almanac says of wasted time, "He
that idly loses 5 shillings worth of time, loses 5s.,
and might as prudently throw 5s. into the river."
He added that avoiding unnecessary costs could
be more profitable than increasing sales: "A
penny saved is two pence clear. A pin a day is a
groat a-year. Save and have."

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 ISE 251 – History of Lean
Manufacturing
• More Franklin [from The Way to Wealth]:
• "You call them goods; but, if you do not take care, they
will prove evils to some of you. You expect they will be
sold cheap, and, perhaps, they may [be bought] for less
than they cost; but, if you have no occasion for them,
they must be dear to you. Remember what Poor
Richard says, 'Buy what thou hast no need of, and ere
long thou shalt sell thy necessaries.' In another place
he says, 'Many have been ruined by buying good penny
worths'.
• Henry Ford was inspired by this sentiment

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 ISE 251 – History of Lean
Manufacturing
• Time and motion study pioneer Frank Gilbreth
observed bricklayers and changed the location of
their stock material to eliminate bends that
wasted time
• Frederick Taylor who pioneered scientific
management introduced standardization and
best practice deployment
• Shigeo Shingo implemented error-proofing [poka
yoke] and the Single Minute Exchange of Dies
[SMED]
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 ISE 251 – History of Lean
Manufacturing
• Henry Ford was a waste hawk in his production
line. He implemented standardization of parts,
design for manufacture [DFM], JIT, and tolerances.
• Many of these concepts had been developed
earlier (in some cases much earlier), but Ford
applied these systematically on an industrial scale.
• His view on waste [from My Life and Work]:

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 ISE 251 – History of Lean
Manufacturing
• “I believe that the average farmer puts to a really
useful purpose only about 5%. of the energy he
expends.... Not only is everything done by hand, but
seldom is a thought given to a logical arrangement. A
farmer doing his chores will walk up and down a
rickety ladder a dozen times. He will carry water for
years instead of putting in a few lengths of pipe. His
whole idea, when there is extra work to do, is to hire
extra men. He thinks of putting money into
improvements as an expense.... It is waste motion—
waste effort— that makes farm prices high and profits
low.” 32
 ISE 251 – History of Lean
Manufacturing
• The Arsenal of Venice is a well-documented
example of using lean manufacturing principles
(although the Carthaginians used many as well to
build their fleet) such as the assembly line and
value stream management, even if these were not
defined at the time.
• Begun around AD 1104, it became one of the
earliest and largest industrial enterprises,
covering about 15% of Venice’s land area.
 ISE 251 – History of Lean
Manufacturing
• The Arsenal also used work cell management,
creating prefabricated components to build its
ships. Prefabricated components saved time, and
the Arsenal had its own dedicated forest for wood
supplies with 16,000 workers.
• This was tied to innovations such as frame-first
manufacture (as opposed to hull-first) and
interchangeable parts that saved time. The result
was an effectiveness not seen again until after the
Industrial Revolution, capable of building a ship
per day, fully outfitted.
 ISE 251 – History of Lean
Manufacturing
• Another example, seemingly counterintuitive,
is the United States Postal Service
• It is legally bound to deliver six days per week,
from Barrow, Alaska to Key West, Florida and
the associated territories, bases, etc.
• 300,000 letter carriers deliver 513 million
pieces of mail, more than 40% of the world’s
volume, at a steady first-class letter cost
regardless of destination.

Devin Leonard, "Neither Snow Nor Rain", Grove Press 2016

 ISE 251 – History of Lean
Manufacturing
• The USPS uses mule trains in Arizona, bush pilots
in Alaska, and “shirt pocket” routes in Montana
and North Dakota.
• This is done despite the loss of several billion
letters per year to the internet, and the
Congressionally mandated pension issue.
• In order to make some extra cash, the USPS also
delivers Amazon’s packages on Sundays.
 ISE 251 – History of Lean
Manufacturing
• The USPS has a reputation of being a lumbering
behemoth. Winton Blount, then Postmaster
General, observed in 1968 that “No one really
runs the Post Office”.
• There are constant comparisons to FedEx, DHL,
UPS, etc., but as a rule the prices at the USPS are
better than those other operations.
• There are other surprises as well:
 ISE 251 – History of Lean
Manufacturing
• The USPS transports more items (of all sizes) in
nine days than UPS does in a year.
• The USPS moves more items in seven days than
FedEx does in a year.
• In 2011, Oxford Strategic Consulting did a study of
national postal services and found that the USPS
was by far most efficient at 268,894 pieces per
employee, double that of the Royal Mail and 5x
the performance of the Deutsche Post.
 ISE 251 – History of Lean
Manufacturing
• Fundamentally, Lean Manufacturing is about
maximizing efficiency.
• There will be discussion about tools, and as
Homework 1 will examine, the methods and
styles.
• The point is improvement, and this course will
accept any appropriate method (with some
defined Lean tools such as a Value Stream Map)
to get there.
 ISE 251 – History of Lean
Manufacturing
• When Fordism and Taylorism took hold, the mass
production paradigm created several problems:
• Alienation of the workforce was one of the reasons
Ford had to pay somewhat higher wages than his
competitors, because of the dehumanizing effect
of the assembly line. Another reason was that
Ford wanted to ensure his workers could afford his
cars, and so ensured the market would be there.
He also fired employees caught driving other
brands. This meant a 370% turnover in 1913.
 ISE 251 – History of Lean
Manufacturing
• The Push-type nature of production with its
emphasis on quotas meant that the quality of
what was produced was less important than
hitting the numbers.
• The famous NUMMI experiment bears this out,
since the GM plant had one of the worst
reputations for quality in the entire country (it
was not unusual to find liquor bottles inside the
doors), which is part of the reason it was closed.
 ISE 251 – History of Lean
Manufacturing
• Machinery followed a trend toward economies of
scale , driving down the per-unit manufacturing
costs of components without fully considering the
effects of carrying costs to store and manage
work-in-progress (WIP) inventory.
• Inventory has intrinsic value, and is listed as an
asset on the balance sheet, which of course
means that it will be taxed.
• Larger batches and WIP also delays detection of
defects.
 ISE 251 – History of Lean
Manufacturing
• In many cases, the engineering of the product was
split into independent groups with minimal
interactions, which hampered resolution of design
problems.
• This was able to work as long as no outside
influences would revise the business landscape.
• However, change is inevitable, and so when OPEC
imposed an embargo on the USA for backing
Israel in the Yom Kippur War, the wasteful model
started to fall apart.
 ISE 251 – History of Lean
Manufacturing
• The other change driver was something akin to
desperation (which will be seen again in the
NUMMI discussion)
• Japan’s Toyota faced bankruptcy due to restricted
credit intended to rein in inflation, combined with
labor restrictions imposed in 1946. Toyota
therefore cut a deal with its employees to get
through the crisis and in a first, make the
employees partners in process management.
 Tech / ISE 145 – History of Lean
Manufacturing
• As shall be seen later in the term, many of the
wastes created by push-type manufacturing are
directly addressed by Lean Manufacturing
principles. However, Taylor and Ohno’s systems
were not mutually exclusive.
• Taiichi Ohno used Taylor’s ideas of standardized
work, continuous improvement, as well as time
and motion studies to develop the Toyota
Production System.
 Tech / ISE 145 – History of Lean
Manufacturing
• As shall be expanded upon more fully later in the
term, NUMMI was a success primarily because it
empowered its employees, made quality THE top
priority, and worked aggressively to implement
the necessary changes.
• As an experiment, it went well beyond its initially
planned period.
• NUMMI is also the only zero-defect plant in the
USA, which is something several Toyota plants in
Japan could not achieve.
 ISE 251 – History of Lean
Manufacturing
• Genichi Taguchi demonstrated the inadequacy of
goalpost quality measurement, and provided the
impetus away from Quality Control (after the
process) to Quality Assurance (during the process)
as a concept.
• Deming used Taguchi’s Loss Function model in his
own quality movement in the ‘80s.
• Taiichi Ohno at Toyota brought the themes
together in the TPS, which became Lean after
modifications
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 ISE 251 – History of Lean
Manufacturing
• The Seven Deadly Wastes [muda]
• Transport
• Inventory
• Motion
• Waiting
• Overproduction
• Overprocessing
• Defects / poor quality

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 ISE 251 – History of Lean
Manufacturing
• Some of this can be taken to excess, where
“lean” isn’t really lean.

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 ISE 251 – Program vs. Project
Management
• Projects deliver an output, something discrete and
quantifiable in simple terms [installation, a bridge,
etc.];
• Programs create deliver an outcome [increased
revenue, capability, larger customer base], and can
include several projects in the implementation
combined with other deliverables. The coordination
of several projects can harness economies of scale in
planning, supplier qualification, etc.

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 ISE 251 – Program vs. Project
Management
• Project managers focus on getting their project done
correctly, while program managers focus on getting
the long term improvements done, even if sacrificing
a project becomes necessary.
• Programs are tied in with the organization’s long-
term strategy, i.e. “raising market share to 45% by
2020”, with less defined methods of achievement.
Projects have formal achievement goals and
methods.
• Projects are finite, programs are not always finite
(especially in the government setting)
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 ISE 251 – Program vs. Project
Management
• Summary of Differences
• A project is unique and is of definite duration.
A program is ongoing and implemented within
a business to consistently achieve certain
results for the business.
• A project is designed to deliver an output or
deliverable and its success will be in terms of
delivering the right output at the right time
and to the right cost.

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 ISE 251 – Program vs. Project
Management
• Summary of Differences, continued
• Program management includes management
of projects which, together, improve the
performance of the organization. A program's
success will be measured in terms of benefits
(actual and perceived) relative to the costs
(actual and perceived).
• Quality systems are sometimes described as a
“cult” by those who do not understand.

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 ISE 251 – Program vs. Project
Management
• Summary of Differences, continued
• Benefits are the measures of improvement of
an organization and might include increased
income, increased profits, decreased costs,
reduced wastage or environmental damage,
more satisfied customers. In central or local
government organizations, benefits might
include providing a better service to the
community

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 ISE 251 – Program vs. Project
Management
• Summary of Differences, continued:
• In the course of achieving required results,
business programs will normally understand
related business constraints and determine the
processes required to achieve results based on
resources allocated. Improvement of processes
is a continuous operation that very much
contrasts a program from a project.
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 ISE 251 – Program vs. Project
Management
• Summary of Differences, continued:
• At the lowest level project managers co-
ordinate individual projects. They are overseen
by the program manager who accounts to the
program sponsor (or board).
• There will normally be a process to change the
predetermined scope of a project. Programs
often have to react to changes in strategy and
changes in the environment in which the
organization changes. 56
 ISE 251 – General Lean Notes
• As with Six Sigma, the goal is improvement
and efficiency for any operation, and we shall
see how performing the elements of lean
operation will also enhance the manager’s
ability to detect, assess, and solve problems in
less time. This means less landfill created by
out of control processes.
• Your production team will be your best
resource for this screening exercise.

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 ISE 251 – General Lean Notes
• Another topic which needs more attention is the
actual act of measurement. We will discuss
SMART in much more detail later in the term, but
realize that the Critical-to-Quality measurements
should be detectable with sufficient precision to
permit assessment. Proof of improvement is
required, not just stating things are better. A
couple of examples come to mind:
• Inner diameter measurement with pin gauges
• Active Af assessment of nitinol.
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 ISE 251 – General Lean Notes
• Measurement, continued
• On the former topic, if there is no “bounce” in the
data because of the step (say 0.0005 inch), one
cannot get a useful estimate of process variation. It
may be better to test the goal of the process (e.g.
pressure test for leakage to 200 psig) to get bounce.
• On the latter topic, ASTM F2082 permits DSC and
bend and free recovery as methods to determine
when the nitinol recovers a shape set, a critical
characteristic to ensure stents / closure devices
recover when and where needed, and not sooner.
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 ISE 251 – General Lean Notes
• Measurement, continued
• In the case of the DSC, there is a disconnect between the
characteristic being tested (heat flow) and the
characteristic of interest (recovery) and what’s worse,
they do not correlate well.
DSC Af-BFR Af Difference vs BFR Af Temperature

y = -0.0091x2 + 0.5634x + 7.5204

R² = 0.0617
DSC Af - BFR Af (°C)

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-10.00 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00
Active Af by Bend and Free Recovery (°C)
 ISE 251 – General Lean Notes
• If one severely refines the sample space, there
is improvement in R2, but one still needs to
address the difference in what is observed:
SEA Tubing Delta DSC Af- BFR Af vs DSC Af
60.00

50.00 y = 0.0145x2 - 0.046x + 7.9916

R² = 0.7588

40.00
DSC AAf - BFR Af (°C)

30.00

20.00

10.00

0.00
-10.00 0.00 10.00 20.00 30.00 40.00 50.00 61
60.00
DSC Af (°C)
 ISE 251 – General Lean Notes
• Even mathematical constructions can give
inaccurate outcomes.
• Several year ago the instructor won a debate with
a customer over the formal definition of active Af,
where the customer claimed it was too low (at 17
°C based on the construction method of F2082 of a
plot). However, the nitinol was clearly martensitic
at 22 °C in the conference room using a simple
demonstration.
• Ensure any modeling is validated to actual systems
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 ISE 251 – General Lean Notes
• This brings us back to SMART:
1. Specific
2. Measurable
3. Achievable
4. Realistic
5. Tangible
• Review Ministats and SPC Examples Excel files in
Canvas
• NIST Handbook homepage
• http://www.itl.nist.gov/div898/handbook/index.ht
m
63
 ISE 251 – General Lean Notes
• Remember to keep a clear view of the big picture:

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 ISE 251 – General Lean Notes
• Questions?

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