Tools for Continuous

Improvement and LEAN

Manufacturing

An Introduction to the Principles of

Lean Manufacturing
21/03/24
Agenda

• Review brief history of manufacturing systems

• Distinguish between mass, craft and lean manufacturing
• Introduce key Concepts of
Lean Manufacturing
• Review the kinds of changes needed to be considered a
lean manufacturer.
Readings

• Chapter 18 of Computer Aided Manufacturing II, Wang, H.P., Chang,

T.C. and Wysk, R. A., Edition (2007 expected)
http://www.engr.psu.edu/cim/ie450/ie450ho1.pdf
• “Building the Lean Machine,” Advanced Manufacturing, January 2000.
http://www.engr.psu.edu/cim/ie450/buildingthelean.pdf
Objectives

• To identify waste elements in a system

• To apply value stream analysis to a complex
engineering/manufacturing system
• To implement 3 M’s in a complex engineering
environment
• To be able to identify and implement the 5Ss of lean
Craft Manufacturing
• Late 1800’s
• 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.
Exercise

Individually, respond to the following question (3-5

minutes)

What are the most prevalent forms of waste in a job that

you’ve had or in a process (or activity) that you are very
familiar with?

For the assignment that you are doing, would you expect all
process plans to be the same? How different?
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
Presentation

• Asian culture has had a significant impact on the rest of

the world.
– Many words used in our daily languages.
• Martial arts, religion or food.

• Within the business environment.

– Improvement tools (kaizen tools)
– Production philosophies such as Just-in-time.
• Just-in-time philosophy is also known as Lean
Manufacturing.
Presentation

• Another important philosophy is the concept developed

by a Japanese consultant named Kobayashi.
– Based on a methodology of 20 keys leading business on a
course of continuous improvement (kaizen).

• Finally, the production core elements will be presented

in order to focus on improvement actions.
– In addition, a resource rate to measure improvement
results is also explained.
Introduction

• Continuous improvement is a management philosophy

based on employees’ suggestions.
– It was developed in the United States at the end of the
19th century.

• Nevertheless, the most important improvements took

place when this idea or philosophy arrived in Japan.
– Japan was already utilizing tools such as quality circles.
• When they combined these two ideas, kaizen was born.
Introduction

• In 1926 Henry Ford wrote

– “To standardize a method is to choose out of the many

methods the best one, and use it. Standardization means
nothing unless it means standardizing upward.

Today’s standardization, instead of being a barricade against

improvement, is the necessary foundation on which tomorrow’s
improvement will be based.

If you think of “standardization” as the best that you know

today, but which is to be improved tomorrow - you get
somewhere. But if you think of standards as confining, then
progress stops.”
Kaizen vs Reengineering

• Creating an useable and meaningful standard is key to

the success of any enterprise.
• Businesses usually utilize two different kinds of
improvements.
– Those that suppose a revolution in the way of working.
– Those that suppose smaller benefits with less investment.

Final situation

productivity

Kaizen
Reengineering
Initial situation
time
Kaizen vs Reengineering

• The evolution consists of continuous improvements being

made in both the product and process.

• A rapid and radical change (kaikaku) process is

sometimes used as a precursor to kaizen activities.
– Carried out by the utilization of process reengineering or a
major product redesign.
– Require large investments and are based on process
automation.
• In the U.S., these radical activities are frequently
called “kaizen blitzes”.
Kaizen vs Reengineering

• If the process is constantly being improved (continuous

line), the innovation effort required to make a major
change can be reduced (discontinuous line in the left).
– Otherwise, the process of reengineering can become very
expensive (discontinuous line in the right).

Final situation

productivity

Kaizen
Reengineering
Initial situation
time
Improvement philosophies and methodologies

• In order to find the source of a problem, it is important

to define and understand the source and core of the
problem.

• Problem -> Any deviation with respect to the standard

value of a variable (quality and production rate).
– It is necessary to know what the variable objective is
(desired standard) and what is the starting situation in
order to propose a realistic objective.
Improvement philosophies and methodologies

• Three main factors that production managers fear.

– Poor quality.
– Increase of production cost.
– Increase in the lead time.
• Production improvements should be based on the
improvements of processes as well as operations.
– Problems can appear in any of the basic elements that
constitute the production area.
Improvement philosophies and methodologies

• Some example of problems.

– Defects, obsolete work methods, energy waste, poorly
coached workers, low rates of performance in machines
and materials.
• By analyzing the production management history, several
improvement approaches can be identified.
– Just-in-time Methodologies (Lean Manufacturing).
– 20 Keys to Workplace Improvement (Kobayashi).
• The keys to the Japanese success are.
– Simple improvement methodologies.
– Workers respect.
– Teamwork.
Just-in-Time. Introduction

• In accordance with this philosophy principle, nothing is

manufactured until it is demanded, fulfilling the
customer requirements
– “I need it today, not yesterday, not tomorrow.”

• The plant flexibility required to respond to this kind of

demand is total, and is never fully obtained.
– It is critical that inventory is minimized.
• Product obsolescence can make in-process and finished
goods inventory worthless.
Just-in-Time. Introduction

• In 1949 Toyota was on the brink of bankruptcy.

– While in the United States Ford’s car production was at
least 8 times more efficient than Toyota’s.
• The president of Toyota, Kiichiro Toyoda, presented a
challenge to the members of his executive team.
– “To achieve the same rate of production as the United
States in three years.”
• Taiichi Ohno, vice president of Toyota, accepted his
challenge.
– Inspired by the way that an American supermarket works,
“invented” the Just-in-time method.
• With the aid of Shigeo Shingo and Hiroyuki Hirano.
 Just-in-Time. Introduction
Thinking
revolution

• Ohno and Shingo wrote their

The 5S
goal.

Deliver the right material, in Poka-Yoke

Standard
operations Jidoka

the exact quantity, with

Workforce optimization
perfect quality, in the right

Visual Control
Multi-
place just before it is TPM
One-Piece
flow
functional
workers
needed”.
Leveling
Kanban SMED
• They developed different Production

methodologies.
JUST IN TIME
 Just-in-Time. Introduction

• The systematic application of all the

Thinking
revolution

The 5S
methodologies create a new management
philosophy.
Poka-Yoke
Standard
Jidoka
– The real value is the knowledge acquired
during its implementation.
operations
Workforce optimization
Visual Control

One-Piece Multi-
TPM functional
flow workers

• The philosophy developed in Toyota was not

accepted until the end of the sixties.
Leveling
Kanban SMED
Production

– Japan in 1973 benefited from the petroleum

JUST IN TIME
crisis and started to export fuel efficient
cars to the United States.
– Since the 1970s, Japan has been the pioneer
of work improvement methodologies.
 JIT. Thinking Revolution

• The Western world employed the following

formula to obtain the price of a product.
– Price = Cost + Profit.
– In Japan, mainly Toyota, employed the
following expression.
Thinking
revolution

The 5S
• Profit = Price – Cost.
– Today, this formula is used worldwide.
Standard
Poka-Yoke Jidoka
operations
Workforce optimization
Visual Control

TPM
One-Piece
flow
Multi-
functional
workers
• In order to make sure that Toyota would
work like the supermarket it was necessary
to identify and eliminate all business and
Leveling
Kanban SMED
Production

JUST IN TIME
production wastes.
 JIT. Thinking Revolution

• The real cost is “as big as a seed of a plum

tree.”
– In some cases, manufacturers, let the seed
(cost) grow as big as a tree.
• Managers try to decrease the cost by
Thinking
revolution

The 5S
cutting some leaves out.
– In reality, it is more efficient to eliminate
Poka-Yoke
Standard
operations
Jidoka tasks that do not add value to the product.
Workforce optimization

• Reducing the tree to a smaller size is

Visual Control

TPM
One-Piece
flow
Multi-
functional
workers
equivalent to planting a smaller seed.
Kanban
Leveling
SMED
• The goal of Toyota’s executives was to find
this plum tree seed and work hard to
Production

JUST IN TIME reduce the cost.

 JIT. Seven types of Waste

• Hiroyuki Hirano defined waste as

“everything that is not absolutely
essential.”
Thinking
– Few operations are safe from elimination.
revolution

• He also defined work as “any task that adds

The 5S
value to the product”.
Standard
– In Toyota’s factories outside of Japan, they
required between 5 to 10 times more
Poka-Yoke Jidoka
operations
Workforce optimization

operations to produce the same car.

Visual Control

One-Piece Multi-
TPM functional
flow workers

• Shigeo Shingo identified 7 main wastes

common to factories.
Leveling
Kanban SMED
Production

JUST IN TIME
 JIT. Seven types of Waste

• Overproduction
– Producing unnecessary products, when they
are not needed and in a greater quantities
than required.
Thinking
revolution
• Inventory.
The 5S – Material stored as raw material, work-in-
process and final products.
Standard

• Transportation.
Poka-Yoke Jidoka
operations
Workforce optimization

– Material handling between internal sections.

Visual Control

One-Piece Multi-
TPM functional
flow workers

• Defects.
– Irregular products that interfere with
Leveling
Kanban SMED
Production

productivity stopping the flow of high

JUST IN TIME
quality products.
 JIT. Seven types of Waste

• Processes.
– Tasks accepted as necessary.
• Operations.
Thinking
revolution
– Not all operations add value to the product.
• Inactivities.
– Correspond to machines idle time or
The 5S

Poka-Yoke
Standard
operations
Jidoka
operator’s idle time.
Workforce optimization
Visual Control

One-Piece Multi-
TPM functional

Inventory is considered the type of waste

flow workers

Kanban
Leveling
Production
SMED with greater impact
JUST IN TIME
JIT. Inventory

• Inventory is a sign of an ill

factory because it hides the
problems instead of resolving
them.
– For example, in order to cope
with the problem of poor
process quality, the size of
production lots is typically
increased.
• Products that will probably
never be used, get stored.
JIT. Inventory

• If the problem that produces

the low quality is solved
inventory could be reduced
without affecting service.

• Sometimes it is necessary to
force a decrease in inventory
in order to identify the
production variability that
necessitated it.
– Then, the work method can be
changed.
Lean Manufacturing

• Lean Manufacturing is the systematic elimination of waste.

– Lean is focused at cutting “fat” from production activities.
• Lean has also been successfully applied to administrative
and engineering activities as well.
• Many of the tools used in lean can be traced back to
Taylor, Ford and the Gilbreths.
– The Japanesse systematized the development and evolution
of improvement tools.
• Lean Manufacturing is one way to define Toyota’s
production system.
– MUDA is the term chosen when referring to lean. In
Japanese, MUDA means waste.
Lean Manufacturing

• Lean Manufacturing is supported by three philosophies.

– Just-in-time
– Kaizen (continuous improvements)
– Jidoka.
• Translates as autonomation.
• Machinery automatically inspects each item after
producing it, ceasing production and notifying humans
if a defect is detected.
• Toyota expands the meaning of Jidoka to include the
responsibility of all workers to function similarly.
Lean Manufacturing

• Traditional approximations improves the lead time by

reducing waste in the activities that add value (AV).
• Lean Manufacturing reduces the lead time by eliminating
operations that do not add value to the product (MUDA).

95% MUDA 5% VA 95% MUDA 5% VA

Lead Time Lead Time

98% MUDA 2% VA 90% MUDA 10% VA

Lead Time Lead Time

 20 Keys to workplace improvement

1
• Iwao Kobayashi, in 1988, published a
9 11 12 20
book explaining 20 keys to Workplace
7 16
improvement.
14 5 – They all must be considered in order
6 4 to achieve continuous improvement.
17 8 • These 20 keys are arranged in a
18 15 circle.
19 10 13
3 – Shows the relations between the keys
2
and their influence on the three main
factors.
• Quality, cost and lead time.
 20 Keys to workplace improvement

1 11 20
Cleaning and Quaility Leading
12
Organizing 9 Assurance Technology
Developing
Maintaining System
your

• There are four keys

Equipment
Suppliers
7 16

outside the circle.

Zero Monitor Production
Manufacturing Scheduling

14
5 – Keys 1, 2 and 3 must
Empowering
Quality
be implemented
Quick
Workers to
Changeover
Make improve-
Technology
ments
before the rest.
6
Method
4
Reducing
– Key number 20 is the
Improvement Inventory
result of
Cost Lead implementing the
17
Efficiency
time 8
Coupled
other 19 keys.
Manufacturing
Control

18 15
Using Cross
Information Training
systems
19
13
Conserving
10 Eliminating
Energy and 3
Time Control Waste
2 Materials Improvement
And
Rationalizing Team
Commitment
the system Activities
20 Keys to workplace improvement

• Kobayashi divided each key into five levels and set some
criteria to rise from one level to the next.
– Kobayashi offers the steps to reach the final level gradually
rather than attempting to directly reach the top.
 20 Keys to workplace improvement

1
20 2 • Kobayashi presents a radar
19 3 graphic to show the evolution
18 4 of the factory
– The scoring of each key is
17 5
represented.
16 6

15 7 • Kobayashi recommends to
improve all the keys equally.
14 8
– In the radar graphic, the
13 9 factory’s scoring will grow
12 10 concentrically.
11
Overall Equipment Efficiency

• To improve the productivity of production equipment

Nakajima summarized the main time losses for
equipment based on the value of three activities.
• Available work time -> Calendar time.
– Fixed time for planned stops -> Preventive maintenance,
operators break.
• The rest of the time is considered load time.

Planned
Load time stops

Calendar time
Overall Equipment Efficiency

• Six main causes that reduce valid operation time.

– Breakdowns.
• The time that the machine is stopped by repairs.
– Setup and changeovers.
• Corresponds to the change time between models, or between
products of the same model.
– Idling and minor stoppage.
• Loss time caused by the processes´ randomness or by the worker-
machine cycle complexity.
– Reduced speed.
• Caused by the wear of components.
– Defects and reworks.
• Low quality products.
– Starting losses.
• Machine produces defects until it reaches the operation steady
state.
Overall Equipment Efficiency

• These six main losses are grouped.

Load time

Operating time

Useful time
Defects and rework
Starting losses
Idling and minor stoppages
Reduced speed
Breakdowns
Setup and changeover
Overall Equipment Efficiency

• The previous grouped losses define three basic indicator.

– Availability, performance and quality.
– Overall Equipment Efficiency (OEE) = A · P · Q

Load time

Operating time

Overall Equipment
 A P Q
Effeciency (OEE)

Useful time

processed units  defective units

Q  Quality   100
processed units
stardard cycle time  processed units
P  Performanc e   100
operating time

load time  breakdown and setup time

A  Availabili ty   100
load time
Overall Equipment Efficiency

• Objectives predicted for each indicator

by Nakajima.
– More than 90% in the availability.
– More than 95% in the rate of
performance.
– More than 99% in the rate of quality.
• The main advantage of the
implementation of these rates is that
they can show how the improvements
carried out affect directly the
equipment efficiency.
Overall Equipment Efficiency
1,2 0 0 1,2 0 0

1,0 0 0 1,0 0 0

0 ,8 0 0 0 ,8 0 0

0 ,6 0 0 0 ,6 0 0

0 ,4 0 0 0 ,4 0 0
A A
P P
0 ,2 0 0 0 ,2 0 0
Startitg situation Q Transitory improvement Q
OEE OEE
0 ,0 0 0 0 ,0 0 0
1 4 7 10 13 16 19 2 25 2 31 3 37 4 4 4 4 52 1 4 7 10 13 16 19 2 25 2 31 3 37 4 4 4 4 52

1,2 0 0 1,2 0 0

1,0 0 0 1,0 0 0

0 ,8 0 0 0 ,8 0 0

0 ,6 0 0 0 ,6 0 0

0 ,4 0 0 0 ,4 0 0
A A
P Permanent improvement but P
0 ,2 0 0 0 ,2 0 0
Permanent improvement Q
worsening in the OEE rate Q
OEE OEE
0 ,0 0 0 0 ,0 0 0
1 4 7 10 13 16 19 2 25 2 31 3 37 4 4 4 4 52 1 4 7 10 13 16 19 2 25 2 31 3 37 4 4 4 4 52
Other Tools

• Visual Factory

• Error Proofing

• Quick Change-over

• Total Productive Maintenance

5S Programs

• Seiri (sort, necessary items)

• Seiton (set-in-order, efficient placement)
• Seison (sweep, cleanliness)
• Seiketsu (standardize, cont. improvement)
• Shitsuke (sustain, discipline)
Visual Factory

• “Ability to understand the status of a production area in 5

minutes or less by simple observation without use of computers
or speaking to anyone.”
• 5-S
– 1S Sift and Sort (Organize)
– 2S Stabilize (Orderliness)
– 3S Shine (Cleanliness)
– 4S Standardize (Adherence)
– 5S Sustain (Self-discipline)
Questions?