Lean Enterprise

Lean Principles, Lean Thinking, Lean

Manufacturing, Lean Enterprise

INDU 6221

Dr. M. Talla
 Today’s Lecture
Lean Principles and Lean Thinking

Lean Manufacturing

Lean Enterprise

Lean Tools

Discussion: Think of Lean at Concordia

 Why Lean? What is Lean?
What is a Lean Enterprise?
Maximize customer value while minimizing waste.
Lean means creating more value with fewer resources.
Lean enterprise understands customer value; improves
processes continuously. ➔ value creation ➔ zero waste
Lean thinking is a business methodology (that focuses on 5 Principles):
❖ Value ➔ through built in quality (Jidoka, Poka-yoke)
❖ Value stream ➔ through Takt time or rhythm (operating time/demand)
❖ Flow ➔ reducing batch sizes (reduce inventory, set-up time, etc.)
❖ Pull ➔ from upstream at takt time
❖ Perfection ➔ through kaizen (continuous improvement)
kaikaku (radical improvement)
 Why Lean? What is Lean?
What is a Lean Enterprise? (2)

Eliminating waste along entire value streams: Create

processes that need less human effort, less space, less
capital, and less time to make products and services at
far less costs and with less or no defects.
Respond to changing customer desires with high variety,
high quality, high performance, and faster. IT helps!
Lean for Production and Services: Lean applies in every
business and every process. It is not a cost reduction
program, but a way of thinking and acting.
Transformation to Lean is a long term perspective and
perseverance.
 Why Lean? What is Lean?
What is a Lean Enterprise? (3)

What is Lean?
 Why Lean? What is Lean?
What is a Lean Enterprise? (3)

Purpose: What customer problems will the enterprise solve to

achieve its own purpose of prospering?
Process: How will the organization assess each major value stream
to make sure each step is valuable, capable, available, adequate,
flexible, and that all the steps are linked by flow, pull, and leveling?
People: Appoint someone with responsibility, authority, and
accountability to continually evaluate value stream in terms of
business purpose and lean process! ➔ continuously improving!

"Just as a carpenter needs a vision of what to build in order to get

the full benefit of a hammer, Lean Thinkers need a vision before
picking up our lean tools," said Womack. "Thinking deeply about
purpose, process, people is the key to doing this."
 Why Lean? What is Lean?
What is a Lean Enterprise? (3)

The term "lean" was coined to describe Toyota

Production System (TPS); embraced the world!
Lean Supply Chain: both Efficient and Responsive at the
same time!

Lean Thinking, by James Womack and Danel Jones,

founders of the Lean Enterprise Institute and the Lean
Enterprise Academy (UK), became popular!
Understanding "what is lean" ➔ thought process ➔ key
principles ➔ actions applying lean techniques and tools.
 Muda? Oh! Yes. Oh, Oh, No?

Muda is “waste”.

Two types of muda

❖ Type I MUDA –Any activity that does not create value but
is necessary for the function of the process in its current
form ➔ waste that may not be eliminated, e.g., inspection and safety testing

❖ Type II MUDA –Any activity that does not create value and
can be eliminated without affecting the product, e.g.,
movement or transport during manufacturing and distribution , TIMWOOD
 Lean Thinking
Lean is about removing “muda”, i.e., waste
Non-value-added activity that absorbs resources is a waste.
Types of Muda or Waste
❖ Mistakes which require rework
❖ Producing items that has no demand
❖ Processing steps which really aren’t needed
❖ Moving or transporting goods (or employees) from one place or
another without any purpose (non-value added)
❖ Waiting time of downstream activity for o/p of upstream activity
❖ Goods and services that don’t meet customer needs
❖ Muri is unreasonable work ➔ pushing beyond normal limit
❖ Mura is uneven workload ➔ workstations with different capacities
 Lean Thinking

Define value; Prioritize all actions that enhance value

Create processes with value adding activities in the best
sequence
Execute activities without interruption to better serve
customers
Continuously improve processes where possible
Find different ways to make work more satisfying to
employees
 Lean Thinking
Customer-focused: Customer needs and expectations
“pull” enterprise activities and resources
Knowledge-driven: Draws upon knowledge and
innovation from everyone - workers, suppliers, customers
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 and
incremental and continuous improvement
 Lean Thinking
Delivering Just-in-Time: Pull based production
Striving for perfect quality: Completely defect-free parts must
flow to each subsequent process; quality designed-in, not based
on inspection, mistake proofing
Flexibility and responsiveness: Small processing sizes and
quick set-up times; ability to respond to shifts in demand
Trust-based relationships: Mutual commitments and
obligations, internally and externally with suppliers
Continuous improvement (Kaizen): through work
standardization, productive maintenance, root cause analysis,
and worker training and empowerment
 Five Steps to Lean
1. Define Value ➔ Focus on what customer exactly wants
Value is defined by customer; Created by producer

2. Identify the product’s value ➔ through activities stream

Value is defined by customer; Created by producer

3. Flow the Product ➔ Eliminate waste

backtrack, idle, waiting time, scrap, non-value added transport, etc.

4. Pull ➔ Just in Time (JIT) production

triggered by customer.

5. Strive for Perfection ➔ Continuously improve

Principles of Lean Management
 Taylor: Scientific Management

“Whenever a workman proposes an improvement, it

should be the policy of the management to make a careful
analysis of the new method, and if necessary, conduct a
series of experiments to determine accurately the relative
merit of the new suggestion and of the old standard. And
whenever the new method is found to be markedly
superior to the old, it should be adopted as the standard for
the whole establishment”, F.W.Taylor, Principles of
Scientific Management, 1911.
Taylor: Scientific Management
 Ford: Mass Production

Minimised waste in production, and maximised value.

Workers paid $5 per day, more than double the average
Model T cars were cheap for customers. By 1918, half of
all-American cars were Model Ts.
Technique reduced cost from $850 to $290 ➔ Car
became affordable to common man (cost ↓ ➔ demand ↑)
In 1927, around 15,007,034 cars were produced, a record
which stood for the following 45 years.
Henry Ford: Assembly Line
 Toyota Production System

After World War II, Toyota was almost bankrupt.

Post war demand was low and minimising the cost per
unit through economies of scale was inappropriate. ➔
Toyota developed demand-led pull systems.
Japanese couldn’t afford the expensive mass production
facilities like in the US; so they focused on reducing
waste and low cost automation.
Toyota could not afford to maintain high inventory levels
Evolved into Just-in-Time system.
 Just-in-Time ➔ Lean

“In the broad sense, an approach to achieving excellence

in a manufacturing company based upon the continuing
elimination of waste (waste being considered as those
things which do not add value to the product). In the
narrow sense, JIT refers to the movement of material at
the necessary time. The implication is that each
operation is closely synchronised with subsequent ones
to make that possible” APICS Dictionary.
JIT became a part of Lean Manufacturing.
 Lean Manufacturing
Lean manufacturing focuses on eliminating waste in value
stream
 Lean Manufacturing: 7 wastes
Seven major wastes in manufacturing (TIMWOOD)
1. Transport (unnecessary transport)
2. Inventory (work-in-process, and excessive) increases flow time and cost
3. Motion – (people, equipment, parts, backtrack, etc.) which is unnecessary.
4. Waiting – wastes time and money.
5. Overproduction – serious waste; it disrupts smooth flow of material and
inhibits productivity and quality.
6. Over-processing – complex processes rather than simple ones. Over
complexity encourages overproduction trying to recover the investment in
over complex machines.
7. Defects – physical waste. Generates scrap or rework. Defects occur due to
poor processes.
 Lean Manufacturing

Waste is often built into the jobs.

Pre-and-Post Gilbreth Time and Motion Study: Brick laying

Bricklaying Ergonomics

Be creative: Reduce number of operations

Do it in one step: the Lean way!
 Lean Manufacturing

Pioneered by Toyota Japan as the Toyota Production System

Philosophy is to replace complexity with simplicity
Promotes Lean thinking and continuous improvement
Emphasis on minimising inventory
Focuses on eliminating waste, that is anything that adds cost
without adding value
Often a pragmatic choice of techniques is used
Lean techniques, practices, systems were developed
relentlessly.
 Lean Manufacturing
Gemba Kanri, i.e. Workplace management, 5S
Cellular manufacturing
Set-up time reduction
Smallest machine concept (eliminates bottlenecks)
Fool proofing (Pokayoke)
Pull scheduling
Line stopping (Jikoda)
I,U,W shaped material flow
Housekeeping
 Genba Kanri: Workplace
management and 5S
5S, Standard operations, Skills, Kaizen, Visual

What is 5S?
Genba: Workplace improvements, so many!
Lean distinguishes itself
 Lean Enterprise
An enterprise that embraces those 5 lean principles (Value,
Value stream, Flow, Pull, Perfection) is a “Lean Enterprise”.

Lean Enterprise eliminates muda, a.k.a. DOWNTIME.

❖ Defects, Overproduction, Waiting, Non-utilized talent,
Transportation, Inventory, Motion, Extra-Processing

Lean startup principles developed in 2008

❖ Eliminate wasteful practices, Increase value producing practices,
Customer feedback during product development, Build what
customers want, KPIs, Continuous deployment process

Lean Enterprise implements lean practices and tools in

every department: Production, Accounting, HR, …
 Lean Tools

6S = 5S + Safety

Source: http://www.leanproduction.com/top-25-lean-tools.html
 Lean Tools

Source: http://www.leanproduction.com/top-25-lean-tools.html
 Lean Tools

Source: http://www.leanproduction.com/top-25-lean-tools.html
 Lean Tools

Source: http://www.leanproduction.com/top-25-lean-tools.html
 Lean Tools

Source: http://www.leanproduction.com/top-25-lean-tools.html
 Lean Tools

3P is a very important tool as well.

3P: Production, Preparation, Process

 Lean Enterprise

Lean Enterprise focuses on Lean Principles, and

implements lean tools in the enterprise to become lean.
Lean Tools

Basic Lean Tools

1
INDU 6221

Dr. Nadia Bhuiyan

Concordia University
updated by
Dr. M. Talla
Value Stream Mapping

2
 VALUE STREAM
▪ “the processes of creating, producing, and
delivering a good or service to the market.” as
per APICS (American Production and Inventory Control Society).

▪ A value stream may be internal processes to a

company, or it may include external parties.

▪ Sequence of activities for designing, producing,

and providing a specific good or service along
which information, materials and worth flows.
Value Stream
 VALUE STREAM MAPPING
▪ A lean management method for analyzing the current state
and designing a future state
▪ A means of understanding where you are! How to add value
or eliminate waste more effectively.
▪ A paper and pencil tool to help you visualize and
understand the flow of material (forward, i.e. downstream)
and information (background, i.e. upstream) as a product or
customer makes its way through your system.
▪ Value stream mapping usually employs standard symbols to
represent items and processes, therefore knowledge of
these symbols is essential to correctly interpret the
production or service system problems.
▪ Current state ➔ Future state

Value Stream Mapping

 WHY

▪ Time to make is optimized ➔ Improved cost-to-cash

cycle time
▪ Reduced WIP ➔ Less working capital
▪ Better performance and quality
▪ Simplified process

▪ Improved focus ➔ a set or all of these

Working Capital Management

 WHY
▪ In mass (or “batch-and-push”) production pushes
forward as per schedules of Production Control or
Work orders (instead of the actual needs of the downstream
“customer” process) ➔ scope for over production

▪ value-creating time for producing one product is

very short, but the total time that product spends
getting through the plant is very long.

▪ Overproduction leads to shortages as the process is

busy with wrong/other things (items not needed).
 VSM)
▪ Visualize the whole process
▪ Identify the sources of waste
▪ Provides a common language for improvement
▪ Makes decisions about flow more apparent
▪ Ties together lean techniques
▪ Forms the basis of an improvement plan
▪ Presents the linkage between information (demand
info) and material flows
▪ Types of VSM: Process, Factory (door-to-door), Extended

Value Stream Mapping: A Tool for Lean

▪ Planning and preparation.
▪ Identify the target product family or service.
▪ Create a charter, define the problem, set the goals and
objectives, and select the mapping team.
▪ Socialize the charter with the leadership team.
▪ Draw the current state value stream map, which shows
the current steps, delays, and information flows required
to deliver the target product or service, i.e. production
flow (raw materials to consumer) or a design flow
(concept to launch). Use “standard symbols” .
▪ Assess the current state value stream map in terms of
creating smooth flow by eliminating waste.
▪ Draw a future state value stream map.
▪ Create an action plan and implement the action plan to
finally accomplish future (or improved) state.
Value Stream Mapping: Supplier to Customer
▪ Start with a single product family.

▪ Customers only care about their specific product.

▪ Having all product flows on a single map is too

complicated.

▪ Be specific – how many finished part numbers in family,

how much is demanded, and how often.
▪ If mix is complicated you can create a matrix and find a
logical grouping of products:

Assembly Steps and Equipment

P 1 2 3 4 5 6 7 8
R A X X X X X
O B X X X X X X
D C X X X X X X
U D X X X X X
C E X X X X X
T F X X X X X
S G X X X X X
▪ Nobody is usually responsible for the entire value
stream.

▪ Crossing organizational boundaries

▪ Need someone who reports to top manager at the

site for power necessary for change
 DON’T…
▪ …split the task up among area managers and hope
to put it all together at the end.

▪ …map the organization, map the flow of products

or customers.

▪ …start too big or too small, begin at the door to

door level.

▪ …ignore the flow of information

▪ Always collect information while walking the
actual process.
▪ Begin with a quick door-to-door walk.
▪ Begin with shipping and work upstream.
▪ Bring a stopwatch and do not rely on information
that you do not personally obtain.
▪ Map the whole value stream yourself
▪ Always draw by hand and in pencil (no computers)
▪ Produce to your takt time
▪ Develop continuous flow wherever possible
▪ Use Supermarkets to control production where continuous
flow does not extend upstream
▪ Try to send the customer schedule to only one production
process
▪ Level the production mix; Level the production volume

▪ Develop the ability to make every part every day (or faster)
upstream of the pacemaker process.
▪ Objective: Produce at Takt time. Production fluctuations get complicated
when scheduling is done at multiple places in a value stream.
▪ For this reason, a pacemaker is often established. A pacemaker is the
single point where a production process is scheduled.
▪ The upstream processes don't produce without a pull signal originating
from the pacemaker.
 HEIJUNKA
▪ Level refers to a certain number of units of same product, or a combination of
units. Cycle refers to a the production unit.
▪ “Mixed-model sequencing” refers to daily production requirements of each product
or model.
❖ For example: Refer to the table.
Model Daily
❖ A company produces A, B, and C.
demand
❖ Which sequence? A-B-C or C-B-A or A-C-B? A 10
❖ How many times (i.e. cycles) the sequence is repeated? B 15

❖ How many units of each model is to be produced in each cycle? C 5

❖ Depends on setup costs of each model,

Model Daily Units per
❖ Five cycles would result to the table: demand cycle
▪ Consider packaging, setup, space, etc. Optimize. A 10 10/5=2
B 15 15/5=3
C 5 5/5=1
Determine a production plan for these three models using the sequence
A-B-C.
Model Daily demand
Solution: Smallest number is 5. So, 5 cycles or 5 batches.
A 7
Divide by 5 does not yield to exact integers.
B 16
Suppose, each cycle sequence is A-3B-C. C 5
Then 2As, and 1B more to be produced some how, which could be distributed.
Cycle 1 2 3 4 5
Pattern A B(3) C A B(3) C A B(3) C A B(3) C A B(3) C
Extra units to be produced A B A

Suppose Model A quantity is 8 instead of 7, “extra” distribution could be:

Cycle 1 2 3 4 5
Pattern A B(3) C A B(3) C A B(3) C A B(3) C A B(3) C
Extra units to be produced A AB A
▪ To synchronize production at the pacemaker process with sales.

𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑡𝑖𝑚𝑒 𝑝𝑒𝑟 𝑑𝑎𝑦

▪ 𝑇𝑎𝑘𝑡 𝑡𝑖𝑚𝑒 =
𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑑𝑒𝑚𝑎𝑛𝑑 𝑟𝑎𝑡𝑒 𝑝𝑒𝑟 𝑑𝑎𝑦
 CONTINUOUS FLOW

▪ This merges all processes lead times and

downtimes
▪ May want to start with some pull/FIFO then
become more continuous as reliability improves

▪ May not be possible due to

▪ Batching
▪ Shipping from suppliers
▪ Process is too unreliable
 SUPERMARKET PULL SYSTEMS
▪ In a supermarket, shelf keeps exactly the needed items per unit time
▪ Toyota studied supermarkets and applied the same into factory
▪ to control production where continuous flow does not extend upstream.

Kanban Supermarket Example

▪ Using supermarket pull systems, we schedule only one point in
the door-to-door value stream. That point is called pacemaker
process, because how you control production at this process sets
the pace for all the upstream processes.
▪ Fluctuations in production volume at the pacemaker process
affect capacity requirements in upstream processes.
▪ Material transfer from the pacemaker process downstream to
finished goods will be continuous flow (no supermarkets or pulls
downstream of the pacemaker process).
▪ In the future-state map, the pacemaker is the production process
that is controlled by the outside customer’s orders.

▪ In short, the pacemaker process is

▪ The most downstream continuous flow process.
▪ With no supermarkets downstream of pacemaker.

Source: http://todaysleanmanufacturing.com/learning-to-see/pacemaker-process/
Source: http://todaysleanmanufacturing.com/learning-to-see/pacemaker-process/
▪ Create an initial pull by releasing and withdrawing small consistent
elements of work at the pacemaker process.

▪ Called: Pitch = Takt time * pack size

▪ Example: If takt time = 30 seconds, and pack size = 20 pieces, then pitch =
10 minutes

▪ Every 10 minutes
▪ Give the pacemaker instructions to produce one pack quantity
▪ Take away one finished quantity
▪ Distribute the production of different products evenly over time
at the pacemaker process.
▪ Load leveling box
 EVERY PART EVERY DAY

▪ Develop the ability to make every part every day (or faster)
upstream of the pacemaker process.
run time =
(daily requirement, i.e. demand )* (cycle time )
uptime%
available time per day − run time = time left for changeovers
time left for changeovers
number of changeovers =
changeover time
▪ EPEI = 1/(number of changeovers)
▪ EPEI is typically reflected in days or partial days and
represents the time interval between successive runs.
▪ Goal is to decrease or reduce EPEI as much as possible.
▪ Decrease EPEI by: decreasing changeover time, reducing
the number of different parts (i.e. number of set-ups),
decreasing cycle times, and decreasing the volume of
products loaded on a particular machine.
 FUTURE STATE
▪ What is the takt time?
▪ Will you build to a finished goods supermarket or directly to
shipping?
▪ Where can you use continuous flow processing?
▪ Where will you need to use supermarket pull systems?
▪ At what single point in the production chain (the pacemaker
process) will you schedule production?
▪ How will you level the production mix?
▪ What increment of work will you consistently release?
▪ What process improvements will be necessary to make this
work?
31
Lean Enterprise

Flow, Pull, Perfection

INDU 6221

Dr. M. Talla
 Flow

⧫ The objective of flow production is to drastically reduce product

throughput time and human effort through a series of innovations.
Increase the velocity of movement. ➔ Reduces in WIP.
⧫ Reduce bottleneck operation time ➔ Increases throughput rate

step1 step2 step3 step4 step5 step1 step2 step3 step4 step5

Finished
Finished Raw m
Raw m Goods
Lot Lot
Lot shipped

Batch processing Single unit flow

Each unit moves from operation to operation
Entire batch moves from operation to operation

Lean Office: Work cells and Flows

 Flow

⧫ The production rate of parts should match the consumption rate

of parts in final assembly.

Methods:
⧫ Reconfigure the part fabrication tasks so that machines are lined
up and parts are flowing smoothly from m/c to m/c.
⧫ Eliminate muri (over burden), mura (unevenness), and muda
(nonvalue added time) so that parts flow smoothly through the
process
⧫ Avoid batch flow; focus on JIT level loading (Heijunka); better
even with single unit flow.
⧫ Operate the production process at Takt time or pull based.

Heijunka for High Mix Low Volume Environments

 Takt Time
Set a target “takt time” ➔ objective to sales and production.

⧫ Precisely should synchronize the rate of production to the rate

of sales to customers
⧫ Takt Time Calculation Example:
❖ Customers are placing orders at the rate of 48/day
❖ Bike of
Number factory
Bikesworks a single eight-hour
Ordered 48 Bikesshift 6 Bikes
1 Bike
= = =
Number of Hours Available 8 Hours Hour 10 Minutes

⧫ Takt time is adjusted as orders increase or decrease over time

⧫ The production slots created by the Takt Time are clearly
posted on whiteboard or electronic displays (andon boards)
⧫ Lean technique – transparency or visual control – everyone
can see where production stands every moment
Takt Time
Key Points About Takt Time
 Improving Flow

7
6

1
4

5 3

2
Improving Flow
Improving Flow
Improving Flow
Connected Lines
 Layout change
Before Gear
Drive Slot Hobbing
Hole
Milling Lube Slot
Blank Machining Drilling
Bore Honing Milling Gear
Honing Hob Hobbing
CNC Mill Drill
Mill

Dbur.
Dbur. Chamfer
Chamfer
CNC Lathe
Lathe Boring Gear
Gear
CNC Shaver
Shaver
Manual
Manual Tooth
Tooth
Blank Machining Deburring
Deburring Hole
Hole Chamfer
Chamfer
Boring
Boring Gear
After Shaving

CNC Mill
Boring
Mill Drill

Gear
Shaver
CNC Lathe In Out
 Pull

• Pull to visualize takt time through the flow

➢ Pull from upstream at takt time through visual devices, e.g. Kanban
cards, etc. ➔ Visualize the gaps between ideal and actual workplace.

• Pull creates a production tension by edging closer to

single-piece-work and by highlighting problems as
they occur ➔ Complex situations can be resolved.

• Pull is the basic technique to “lean” the company

• Without pull there is no lean thinking.

 Pull: Kanban system

⧫ Kanban (Kan=Visual, ban=card) is a visual signal card

⧫ Kanban card requests the supply of parts. Card is attached to a
container and sent to the preceding station to replenish the
supply of parts.
⧫ Purpose:
1) Authorize production by providing visual signal.
2) Authorize movement.
3) Limits amount of WIP inventory in the system.
4) A tool for driving continuous improvement.

Flow & Pull - the Third Lean Principle

 Rules of a Kanban System

1) Pull is driven by downstream process (or customer).

2) All product or inventory is under kanban control.
3) Only an “empty” kanban authorizes production.
4) Never pass a known defect downstream.
5) Use gradual kanban reductions to drive improvement.
 Kanban

D = Usage rate of work center,

T = Mean waiting time to replenish 1 container (Time for
waiting before production, setup, production, transport)
X = Inefficiency of system requiring safety stock (0 to 1)
C = Capacity of a standard container.

DT is amount of material required to cover the waiting time.

DT.X is the amount required for uncertainty (i.e. inefficiency factor)
DT + DT.X is the total amount of material required.
(DT+DT.X)/C is the number of Kanban cards, each requiring C units.
 Kanban

⧫ Ideal number of Kanban cards or containers (N) is:

DT (1 + X )
N=
C
where D = Usage rate of work center,
T = Mean waiting time to replenish 1 container (Time for
Waiting before production, setup, production, transport)
X = Inefficiency of system requiring safety stock (0 to 1)
C = Capacity of a standard container.
 Kanban cards: Example 1

Usage at a work center is 300 parts per day, and a standard container holds
25 parts. It takes an average of 0.12 day for a container to complete a
circuit from the time a Kanban card is received until the container is
returned in full. Find the number of Kanban cards (containers) needed if
safety stock is 20% of demand during average time for replenishment?
Solution: D = 300 parts per day, T = 0.12 day
C = 25 parts per container, X = 0.2

DT (1 + X ) 300 (0.12)(1 + 0.2)

N= = = 1.73
C 25
Rounding “up” loosens the system. Rounding “down” tightens it.
Better to roundup, i.e. 2 containers here rather than round-down to 1.
 Example 2

Determine the number of containers needed for a workstation that uses 100
parts per hour if the time for a container to complete a cycle (move, wait,
fill, return) is 90 minutes and a standard container holds 84 parts. The
efficiency factor is 0.1.
Solution: D = 100 parts per hour, T = 90 mins = 1.5 hours
C = 84 parts per container, X = 0.1

DT (1 + X ) 100(1.5)(1 + 0.1)
N= = = 1.96  2
C 84

Number of containers = 2
 Example 3
Lead time 75days
Safety time 14days
Total time (= 75+14) 89days
Total time (= 89/30) 2.967months

Monthly demand 50units

Units in pipeline (= 2.967*50) 148.33

Cost of Unit $ 20,000

Units per Kanban
container 25
# of Kanban cards (= 148.33/25) 5.93

Pipeline inventory cost $ 2,966,667

(= 20,000*148.33)
 Perfection

• Seeking perfection through kaizen

➢ Although lean tools improve the process, the perfection is achieved
via developing kaizen spirit in every employee and planning &
implementing kaizen to improve step-by-small-step.
➢ Kaizen literally means change for the better.
➢ Kaizen spirit is about seeking a hundred 1% improvements from
everyone everyday everywhere rather than one 100% leap forward.
➢ Kaizen anchors lean thinking in people, ultimately leads to complete
transformation.
➢ Practicing kaizen together builds self-confidence and the collective
confidence that together we can resolve larger challenges.
 Perfection

• Kaizen is a corner stone of Lean Enterprise tools.

Kaizen gets an incremental improvement whereas 3P (Production,

Preparation, Process = Product & Process redesign) gets a radical improvement.
 Perfection: Kaizen

• Examine current process. Identify small improvement.

Implement it. Measure improvement. Continue doing the
same till significant gain.

• 3 Gens:
➢ Gemba: Workplace. Don’t just plan in boardroom. Go to workplace,
meet people, show respect, gain trust, make them part of Kaizen.
➢ Genbutsu: Actual parts. Don’t observe just flow charts. Look at actual.
➢ Genjitsu: Get the facts. Derive hidden facts or root causes.

• Implement an appropriate tool; and improve in small

steps continuously.
 Kaizen vs. Kaikaku

Radical Improvement Traditional Improvements

⧫Kaikaku can describe radical non- ⧫Repeatedsmall and incremental
recurring improvements or changes improvement steps

⧫Sometimes called radical Kaizen ⧫“Point Kaizen” or Kaizen event

driven improvements .
⧫“Kaikaku teams” often take control
of operations in crisis situation. ⧫“Flow Kaizen” incorporates total
operations in Lean Manufacturing
(TPS)
Kaizen and Kaikaku in Action
 Perfection

• Each improvement leads towards Perfection.

• It’s an endless process ➔ Kaizens to improve, Kaikaku

for quantum leaps towards perfection.

• Both Kaikaku and Kaizen together with appropriate lean

tools to solve issues continuously leads to perfection!
 Exercise: Perfection

• Form teams of 5 students each team.

Kaizen application: In a kitchen
• Watch for 5:50 minutes; stop. Now, focus on the current
process of emptying the dish washer! Girl took 1:25 min.

• You have 5 Minutes to come up with improvements.

“Lean thinking”

• Present improvements in 1 min each team.

 Lean Enterprise
Single Minute Exchange of Dies (SMED) and
Quick Changeover

INDU 6221

Dr. M. Talla
 Muda: Waste.
Mura: Unevenness.
Lean Enterprise Muri: Overburden.

Understanding what lean means; lean thinking, and the 5 principles

to create: Value, Value Stream, Flow, Pull, and Perfection.
Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
(DOWNTIME: Defects, Overproduction, Waiting, Non-utilized-
talent, Transport, Inventory, Motion, Extra-processing
Use lean tools to eliminate waste ➔ Lean enterprise.
production rate ➔ demand rate
Demand drives to the lean!

SMED is one of the main tools

of the Lean Enterprise
 Changeover Time ➔ SMED
Time it takes to change a piece of equipment from
producing the last good piece of a production lot to
the first good piece of the next production lot.
In Services, time between good pieces of work
Setup between production lots. ➔ As quick as possible!
 Changeover Time ➔ SMED

Setup time (or down time)➔Type I Muda (non-value activity but needed)
Internal

Changeover time ➔ Mura (uneven processing ➔ heijunka)

SMED is a “lean” method of reducing waste in

mainly in a manufacturing process to achieve rapid
changeover.

Single Minute? No! Single digit (i.e., < 10 min)!

 SMED: Single Minute Exchange
of Dies
Die is a tool for cutting in manufacturing process.
❖ Shigeo Shingo, Engineer at Toyota found that changing dies on the
large transfer-stamping machines to produce car bodies is the most time
consuming, greater than 8h, ➔ Heijunka not possible!
❖ Companies used EOQ for production to reduce the effect. Refer to table.
❖ Toyota placed precision measurement devices on the transfer stamping
m/cs, and record the necessary measurements for each model's die.
Reduced changeover time from 8h to 1.5h!
❖ Further improvements: keeping tools near by, schedule, etc., reduced
the changeover time to < 10 min. EOQ size became 1. Just by
changeover improvements.
❖ Heijunka possible!
❖ JIT became viable.
❖ Techniques evolved to SMED.
 SMED, the game changer!
The best example of SMED implementation would be pit
stop of a formula 1 race:
Formula 1 Pit Stop: 1950 vs. Today

Quick changeover can turn a race from losing to winning.

SMED is accomplished by a series of Kaizens ➔

continuous improvement. Target is: “One-Step Setup” or
“One Touch Exchange of Dies”.

SMED can provide a competitive advantage to a company

by reducing the lead time and WIP!
Why SMED?
Looking Familiar ?

❑ To eliminate waste that results from “uncontrolled”

processes increasing inventories and lead times.
❑ To gain control on equipment, material & inventory.
❑ Apply Control Techniques to manage process.
❑ Standardize Improvements for Maintenance of
Critical Set-up Parameters.
Traditional practices
Material movement occurs
after the machine is •Completed products are transferred to
turned off. next operation.
•Raw material is moved after the
machine is stopped.
Detection of defects or
missing equipment is noticed
which the machine is running. •Setup tooling delivered after the
changeover has begun.
•Defective product identified after
internal setup has begun.

Defective tooling, fixtures,

setup instruments are
noticed after the machine is •The operator notices that equipment is
missing after internal setup has begun.
turned on.
 SMED: Five Setups (traditional)
1. Preparation - Ensures that all the tools are in working condition, and
placed in the right location.
2. Mounting & Extraction - Removal the tools after the production lot is
completed and placing the new tooling before the next production lot.
3. Establishing Control Settings - Setting all the process control settings
prior to the production run. Inclusive of calibrations and measurements
needed to make the machine, tooling operate effectively.
4. First Run Capability - Includes necessary adjustments (re-calibrations,
additional measurements) required after the first trial pieces are produced.
5. Setup Improvement - The time after processing during which the tooling,
machinery is cleaned, identified, and tested for functionality prior to
storage.
 Shigeo Shingo’s eight techniques
for SMED

1. Separate internal from external setup operations

(Internal setup means “stopping the line, i.e. while m/c is down”.)
2. Convert internal to external setup (e.g. preheating of tools)
3. Standardize function, not shape
4. Use functional clamps or eliminate fasteners altogether
5. Use intermediate jigs (standardized)
6. Adopt parallel operations
7. Eliminate adjustments
8. Mechanization
Quick Change-over: The SMED System
 Shigeo Shingo’s four conceptual
stages (for those 8 techniques)
1. Ensure that external setup actions are performed while the
machine is still running

2. Separate external and internal setup actions. Ensure that

the parts all function. Implement efficient ways of
transporting the die and other parts

3. Convert internal setup actions to external

4. Improve all setup actions.

 Formal method: 7 basic steps for SMED

1. OBSERVE the current methodology

2. Separate INTERNAL and EXTERNAL setup activities
3. Convert (where possible) Internal activities into External ones
4. Streamline remaining internal activities, by simplifying
5. Streamline External activities, so that they are of a similar
scale to the Internal ones.
6. Document the new procedure, and actions that are yet to be completed.
7. Do it all again.
 Formal method: Step 1 for SMED

1. OBSERVE the current methodology

Watch a full changeover at least once – more is better

Videotape is best
 Formal method: Step 2 for SMED

2. Separate the INTERNAL and EXTERNAL setup

activities

Internal activities are those that can only be performed when the
process is stopped, e.g. removing dies and tooling.

External activities can be done while the last batch is being

produced, or once the next batch has started, e.g. preparing
tooling for next setup.
 Formal method: Steps 3, 4 for SMED

3. Convert (where possible) Internal activities into External

ones.
E.g. Pre-heating of tools.
4. Streamline the remaining internal activities, by
simplifying them.
Focus on fixings. Shigeo Shingo observed that it's only the last
turn of a bolt that tightens it. The rest is just movement.
 Formal method: Steps 5, 6, and 7 for SMED

5. Streamline the External activities, so that they are

of a similar scale to the Internal ones.

6. Document the new procedure, and actions that are

yet to be completed.

7. Do it all again: For each iteration of the above

process, a 45% improvement in set-up times
should be expected, so it may take several
iterations for setup to reach the ten-minute mark.
 Implementing Steps 1-5 of SMED
I: Internal, E: External
1. Current State
I

2. Separate full steps to internal and external activity

E I E

3. Convert additional internal to external activity

E I E

4. Kaizen all remaining activity (Adjustments, tweaking)

E I E
5. Future State
E I E Target 50% Improvement
Categorizing traditional setup

Improvement = 95%
 SMED: Reducing setup time
Separate Internal from External activities. Move Internal to
External.
❖ Internal- What has to be done when the machine is down.

❖ External- What can be done while the machine is still running.

Eliminate adjustments- “Poka Yoke”-Error Proofing

Kaizen- (“Change for the Better”) Internal activities and 6S
External activities.
Eliminate Set-Up. (Tools, blocks, gauges, markings)
 SMED: Reducing setup time
Focus on process. Understand the setup time.
Treat “set up” time reduction as Kaizen projects.
Apply PM principles ➔ Breakdown the set-up time
into smaller pieces of work. Find the time for each
piece of work. Identify the pieces of work that can
be done in parallel.
Break down the bottleneck. Assign more resources.
Prepare the project network just for set-up time.
Find the critical path length, i.e. the setup time.
Crash as much as possible.
 SMED: Reducing setup time
via parallel operations
Focus on process. Understand the setup time.
 Reduction in setup time
90+360 min time is reduced to 30+120 min.

Now, it’s possible to produce three parts in the same time.

 Advantages of SMED
Stockless production that drives up inventory turns.
Reduction in footprint of processes with reduced
inventory freeing floor space.
Elimination of unusable stock from model changeovers
and demand forecast errors.
Goods are not lost through deterioration.
Ability to mix production ➔ flexibility and inventory
reductions that led to revolutionized production methods
(large orders ≠ large production lot sizes)
New attitudes on controllability of work process amongst
staff.
 Advantages of SMED
Productivity increases or reduced production time
❖ Increased machine work rates from reduced setup times even if
number of changeovers increases
❖ Elimination of setup errors and elimination of trial runs reduces defect
rates
❖ Improved quality from fully regulated operating conditions in advance
❖ Increased safety from simpler setups
❖ Simplified housekeeping from fewer tools and better organization
❖ Lower expense of setups
❖ Operator preferred since easier to achieve
❖ Lower skill requirements since changes are now designed into the
process rather than a matter of skilled judgment
Flow: Batch vs. One-Piece flow

10+10+1 = 21 min for 1st one

1+1+1 = 3 min for 1st one

Flow: Batch vs. One-Piece flow
 Recap of Japanese
“Current State”? ➔ Initial Set-Up Time
“Kaizen”? ➔ Change for the Better
“Poka Yoke”? ➔ Error Proofing
“SMED” stand for? ➔ Single Minute Exchange of Dies

“TPM”? ➔ Total Productive Maintenance

“Internal & External”?
Activities when m/c is down; Activities while m/c running
“Pro Forma”? ➔ Educated guess of the Future State
“Future State”? ➔ New Standard for Changeover

“Muda”? ➔ Wasteful Activity

“Gemba”? ➔ Work Place
“? ➔
Set-Up Reduction
1
INDU 6221

Dr. Nadia Bhuiyan

Concordia University updated by
Dr. M. Talla
 AGENDA

Lean Product Development

2
 LEAN ENTERPRISE
▪ Understanding what lean means; lean thinking, and the 5 principles
to create Value, Value Stream, Flow, Pull, and Perfection
▪ Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
▪ Use lean tools to eliminate waste ➔ Lean enterprise.

▪ production rate ➔ demand rate

3P: Production, Preparation and Process
▪ Demand drives to the lean!

▪ Lean PD, and DFMA are

integral part of Lean Enterprise.
3
LEAN Product Development
 LEAN ENTERPRISE

▪ Apply lean principles into product design, design for manufacturing, and process
design.
▪ Lean 3P (Production, Preparation and Process) is an event-driven
process for developing a new product concurrently with the operation
that will produce it. 3P is a game-changer that results in lower ongoing
costs.
4
 WHY SHOULD WE FOCUS ON
PRODUCT DEVELOPMENT?
▪ What % of product development time is typically “value
added”?
▪ Is there any demand for the product? ➔ Delphi method for
new product demand forecasting.
▪ Customer side; Company side; Environmental side!
safety standards
▪ Lean thinking ➔ Lean product dev. ➔ Competitive adv.

▪ Lean Product development ➔ DFMA

▪ Lean Process development
5
LEAN PRODUCT DEVELOPMENT

▪ 5 Principles: Value, Value stream, Flow, Pull, and Perfection

▪ Is this product useful to customer ➔ capable?➔Right thing ➔

Process capability to follow Six-sigma Cp and Cpk
▪ Is this process in-control? ➔ Thing right ➔ Statistical Process
Control (SPC) following Xbar chart, R chart, P-chart, C-chart

▪ Did the product design follow lean thinking? ➔ Concurrent

engineering, Standard reusable parts, Fewer parts, Standard
assembly, Scope for improvement, Variety, Delayed
differentiation, Flexibility, etc. 6
 WHAT IS PRODUCT DEVELOPMENT (PD)?
▪ “Set of activities beginning with the perception of a market opportunity
and ending in the production, sale and delivery of a product”.
Ulrich K. and Eppinger, S., “Product Design and Development”.

“1 Month delay = 10% gross profit loss

12 Month delay = 50% revenue loss in slow markets,
90% in fast markets
▪ Demand forecast
▪ Production planning
▪ Process design
7
8
PRODUCT DEVELOPMENT PHASES Pratt & Whitney
Company
P&WC ENGINE (P&WC)
CERTIFICATION
Under Detailed
Study Preliminary Design Design Aftermarket

Passport
Passport

Passport

Passport
Passport
Passport
0 1 2 3 4 5
Authorization
Production
Authorization Authorization Authorization to order Authorization
Lessons
to study to offer to launch Production to manufacture
Learned
Hardware

Customers
▪ Frontend fuzziness created by:
▪ Complex information processing
▪ Tacit or implied knowledge
▪ High uncertainty
▪ High stakes

▪ Effective requirement generation is a pre-requisite for winning (2) :

▪ Management support for the requirements process
▪ Well trained competent people
▪ Structured, tailor able frontend process
▪ ‘Understanding of customer’s needs most important discriminator between
success and failures’ (4)
▪ Consequences of poor requirements and winning may result in:
▪ Program cost overruns (Scope changes, Quality of initial estimate,…)
▪ Rqmt’s changes in design phase are 3 to 6X more costly than in fuzzy front end
▪ Same changes during testing are 30-70X more costly (3).

(2) Myles Walton, MIT, Strategies for Lean Product Development

(3) Joseph Withlin, MIT, ‘Best Practices in User Needs/Requirements Generation
(4) Cooper, ‘Resource Allocation in New Product Process’
▪ Best in Class User Needs/Requirements process
▪ Use of Structured Methods
Identification of ▪
Process
Functional Requirements

Requirements ▪
▪ Process Definition
Design Space vs Point Design

▪ Portfolio Management
▪ Management
involvement
Risk Management
▪
▪ Employee Training
▪ Resource Management ▪ Capacity Management
▪ Available Resources for Technology ▪ Process Leadership
▪ Extent of product requirements definition ▪ Tools
▪ Use of Trade-Offs ▪ R&D Collaboration
Concept ▪ Prioritization of Features
Enablers
▪ Architecture & Growth
Development ▪ Responsibility for Concept Development

▪ Maintenance & support concepts cost estimates

▪ Specified Processes &
Performance indicators
Prototyping
▪
▪ Cross functional inputs
▪ Approval Phase commitment level ▪ Organization type
▪ Project concept description ▪ Roles & responsibilities
▪ Corporate Strategy fit ▪ Employee assignment
to project
Business Case ▪ Product replacement strategy
▪ Front-end team
▪ Technology Planning
Development integrity
▪ Next Generation Architecture ▪ Front-end process
▪ Contingency Plans leadership
▪ Employee participation
LEAN VERSUS FUNCTIONAL PD
(and agile)

(Kaizen) (Kaikaku)

(fast-track)
(concurrent)

Open!
timely with customers, suppliers, and internal Silos!

12
 WHY LEAN PD?
▪ You need lean to foster innovation, integrate new
technologies, and handle ever increasing complexity.

▪ Typically a toolset that provides only piecemeal

capabilities is cobbled together to perform different
stages of the engineering lifecycle. The resulting tools are
disconnected, sporadically maintained, and use an
overwhelming array of disjointed user interfaces to access
partially redundant data.

▪ Engineering a product in a more collaborative, integrated,

seamless way requires an environment that is itself tightly
integrated.
13
PD cycle-time Issues
No Process
for Requirements
Capture
Excessive Requirements
Product Capture & Lack Reqs.
Development Lockdown Takes Lockdown
Cycle Time Too Long Why ? Discipline

Lack Similar
to Product
Capabilities
Why ?
Why ? Rework Loops From
Detailed Design Redesign
Capable Rather than
Starting Before
Resources Reuse Capable
Product Reqs. Are not Available Products
Defined
Why ? Long Lead Time
Parts Procurement
Delay

Detailed Design Supplier

Takes Too Long Selection Time
Why ? Delay
 LEAN PD: DOING THE RIGHT THING
▪ Create the right products
 Create product architectures, families, and designs that increase value for
all enterprise stakeholders.

▪ Use effective lifecycle and enterprise integration

 Use lean to create value throughout the product lifecycle and the
enterprise.

▪ Use efficient engineering processes

 Apply lean thinking to eliminate wastes and improve cycle time and quality
in engineering.
 …faster and more efficient design
 …improved manufacturing
 The rate and quality of output from development depend critically on
knowledge.

15
 TOYOTA PRODUCT DEVELOPMENT SYSTEM
▪ Focus on business performance
▪ Value customers’ opinion
▪ Standardized development milestones
▪ Prioritize and Reuse
▪ Functional teams
▪ Set-based concurrent engineering
▪ Supplier involvement
▪ Chief engineer system
16
 Design then test Test then design
17
“Traditional”, Waterfall Iterative, spiral, agile
THE 13 PRINCIPLES OF LEAN PRODUCT DEVELOPMENT
1. Establish customer-defined value to separate value-added from waste.
2. Front-load the product development process to explore thoroughly alternative
solutions while there is maximum design space.
3. Create a level product development process flow.
4. Utilize rigorous standardization to reduce variation and create flexibility and
predictable outcomes.
5. Develop a chief engineer system to integrate development from start to finish.
6. Organize to balance functional expertise and cross-functional integration.
7. Develop towering competence in all engineers.
8. Fully integrate suppliers into the product development system.
9. Build in learning and continuous improvement.
10. Build a culture to support excellence and relentless improvement.
11. Adapt technologies to fit your people and process.
12. Align your organization through simple visual communication.
13. Use powerful tools for standardization and organizational learning.
18
PRINCIPLE 1: ESTABLISH CUSTOMER-DEFINED
VALUE
▪ Establish and decompose customer-defined value to separate
value-added from waste.
▪ Customer first philosophy
▪ Understand customer defined values
▪ Strive to give defined values to customer

19
 CUSTOMER DEFINES PRODUCT VALUE
▪ Product value is a function of the product

▪ Features and attributes to satisfy a customer need

▪ Quality or lack of defects

▪ Availability relative to when it is needed

▪ Price and/or cost of ownership to meet customer

requirements
20
 VALUE IN PD
▪ “Value added” in product development is creating
useable knowledge and equipment.

21
 Efficient Engineering - Lower Waste
Product Development Eight Deadly Wastes
Environment
• “Chasing” approvals
Excessive Motion • “Searching” for information
Other Searching for
information • Waiting for approvals
Waiting Time • Meetings and conference calls

Over-Engineering • Poorly defined or communicated customer

Approval requirements
of Product • Excess resources lacking clear work activities
Wait Time
Value-
Unnecessary • Processing information from “non-standard”
Added ~35% sources
Processing Time
Project
Work
• Rework
Defects • Failing to meet customer requirements
Meetings &
Conference
Calls Excessive • Poor resource leveling to meet demand
Resources • Minimal understanding of bottlenecks

Rework
Unnecessary • Unnecessary approvals
• Verification loops
Handoff
• Allowing inventory to build up in front of
bottleneck operations (i.e. Static Systems)
Over Production
Source: Deloitte Consulting client experiences
WHY IS WASTE HARD TO SEE IN PD?
 In manufacturing, waste is easy to see excess inventory, extra
steps, extra transportation, waiting, defects, excess motion
and overproduction.

 Finding waste in PD is much more challenging because the

“product” is knowledge: knowledge about customers,
knowledge about technologies and process capabilities
integrated into specific knowledge about how to make a
product - the product design.

 Knowledge is hard to see. Sometimes there are physical

manifestations: drawings, reports, slide sets or prototypes.
But much of the knowledge, and often the most important
knowledge for value creation, resides in the minds of the
individuals engaged in the process.
23
 WASTE IN PRODUCT DEVELOPMENT
Waste Category Example Implication
Defective • drawing errors • excessive changes, scrap
Products • work does not match customer needs • rework, scrap, warranty
• working w/ incomplete requirements • queue time drives lead-time
Over • not using standard parts • no re-use of knowledge
Production • extra features • drives supply chain variation
• projects  desired future business
Excessive • long lead-time, rework
• work-in-process exceeds capacity
Inventories • investment not realized
• partially done work
• excessive engineering changes
Excessive • barriers to adding value
• requirements change impact design
• capacity consumed by rework
Motion • moving info from one person/group to another
• unnecessary items specified • ineffective use of skills
Excessive • too many approvals required • no decision rules
Processing • too much “paperwork” • drives rework and inflexibility
• excessive approvals and controls
• queue time, work-arounds
• process monuments
Transportation • batch processing, no flow
• task switching on multiple projects
• workload  capacity
• project sits for next ‘event’
• excessive multi-tasking
Waiting • delays due to reviews/approvals/testing
• not cost effective
• inefficiencies built-in
deployment/staffing/workload
PRINCIPLE 2: FRONT-LOAD THE PD PROCESS

▪ Front-load the product development process to explore

thoroughly alternative solutions while there is maximum
design space.

▪ Explore the range of possibilities early on, evaluating multiple

product and production process options without committing
in advance to any given alternative. Eliminate weak options
quickly and capture knowledge about key design decisions.

▪ This provides flexibility when encountering problems and

increases the chances of arriving at an optimal solution with
safe performance envelope.
25
 GENERATE USEFUL KNOWLEDGE

▪ Generate knowledge through set-based concurrent

engineering, i.e. final solution is an intersection of
all solution choices

▪ By exploring multiple solutions simultaneously

▪ By aggressively learning about the solutions and

eliminating weak ones.

▪ By converging on a solution only after it has been proven.

26
SET-BASED CONCURRENT ENGINEERING

27
SET-BASED CONCURRENT ENGINEERING

28
PRINCIPLE 3: CREATE LEVEL PD PROCESS FLOW
▪ Eliminate overburden, instability, and waste (muri, mura, and muda)
through cadence, pull, and flow.
▪ Flow: knowledge and material are available when needed.
▪ A portfolio of projects should level the demand on resources and
workload.

29
 MANAGE THE FLOW BY ELIMINATING MURI

▪ Eliminate Muri, i.e., overburden

▪ Target events that “pull” developer effort

▪ Pull: everyone responds directly to the needs of

their customers, producing as required

30
Unreasonable, or
overburden

31
 MANAGE THE FLOW BY ELIMINATING MURA

▪ Eliminate Mura, i.e. instability or unevenness of workload

▪ Release projects into organization on a regular cadence,

use integrating milestones to reduce batch size of
information transfers and establish pull (also as
coordination mechanism across multiple groups.)
 Cadence: projects are scheduled to a predictable rhythm

▪ Variability will be buffered by some combination of

inventory, capacity and time.
32
 MANAGE THE FLOW BY ELIMINATING MUDA

▪ Any activity that does not directly result in

hardware/software or produce useable knowledge should
be eliminated, or redesigned so that it does.

▪ Value Stream Mapping

33
34
PRINCIPLE 4: STANDARDIZATION
▪ Utilize rigorous
standardization to reduce ▪ Best process currently
variation and create known, understood, and
flexibility and predictable used today
outcomes.
▪ Tomorrow it should be
▪ Standard work definitions better based on continuous
improve task efficiency improvement
through increased
predictability and reliability ▪ Standard work is the key to
and provide the basis for repeatability
continually identifying and
institutionalizing
improvements.
▪ Standardization
 Skills
 Design standards
 Processes/milestones/d
eliverables

35
 CAPTURE & REUSE THE KNOWLEDGE
▪ Solve problems at their root and add
to the stock of knowledge. This
reduces the number of problems to
address and allows you to use
knowledge from past learning in
future work to improve products and
processes.
▪ Reuse
▪ Knowledge/experience
▪ Design/design alternatives
▪ Parts/configuration
▪ Limit and tradeoff curves
▪ Engineering standards / design
guides
▪ Reflection by synthesizing and
documenting

36
PRINCIPLE 5: DEVELOP A CHIEF ENGINEER SYSTEM

▪ Develop a chief engineer system to integrate

development from start to finish.
▪ The Chief Engineer:
▪ Leads vehicle development project
▪ Designs the system architecture
▪ Plans the development process and runs it
▪ Drives consensus and tradeoffs
▪ Represents the customer
▪ Makes money

37
PRINCIPLE 6: BALANCE FUNCTIONAL EXPERTISE
AND CROSS-FUNCTIONAL INTEGRATION

▪ Organize to balance functional expertise and cross-

functional integration.
▪ Integrated Product Development (IPT) teams

38
DEEP COLLABORATION
▪ Remove Organizational Barriers
 “…products don't pass from team to team. There aren't discrete,
sequential development stages. Instead, it's simultaneous and
organic” (Grossman).
▪ Ensure consistent Vision
 decisions require their supporting rationale and information its
context in order to be used effectively
▪ Eliminate “not my job” attitude
 Single team responsible for a project
 Team members move fluidly between what has been traditionally
very distinctly defined roles

39
PRINCIPLE 7: DEVELOP TOWERING COMPETENCE
IN ALL ENGINEERS
▪ Highly skilled and well-organized people
▪ Grow teams of experts who can use, generate useful
knowledge.
▪ Establish and support entrepreneurial system
designers.
▪ Lean PD requires a leader who, like an entrepreneur, is
responsible for developing a PROFITABLE product.
▪ Designers should be responsible for contributing to
the success of project results, as a whole, not just
their specialty or tasks.
▪ Be a important part of the team by developing and
sharing deep expertise.

40
TEAMS OF RESPONSIBLE EXPERTS

▪ Create a personnel system that rewards people for creating

and teaching useful knowledge (knowledge that can be
turned into profitable products).
 Create new knowledge around a subsystem
 Communicate it
 Represent it to others, especially the Chief Engineer

▪ Focus on overall project success

▪ Build expert teams by avoiding handoffs

41
PRINCIPLE 8: INTEGRATE SUPPLIERS
▪ Fully integrate suppliers into the product development system.

42
PRINCIPLE 9: BUILD IN LEARNING AND
CONTINUOUS IMPROVEMENT
▪ Knowledge based organization
 Learning and continuous improvement as part of job

▪ By continuously resolving issues as they arise, design review

focuses on convergence of design rather than solving large
batches of accumulated design problems.
▪ The result is more efficient decision-making with continuous
momentum towards a coherent total design that will best fit
customers’ needs.

43
PRINCIPLE 10: FOSTER EXCELLENCE AND
RELENTLESS IMPROVEMENT.
▪ Build a culture to support excellence and relentless
improvement.

44
PRINCIPLE 11: ADAPT TECHNOLOGIES TO FIT
YOUR PEOPLE AND PROCESS
▪ Technologies that enhance the performance of people and
processes

45
PRINCIPLE 12: ALIGN YOUR ORGANIZATION
THROUGH SIMPLE VISUAL COMMUNICATION
▪ Align your organization through simple visual communication.
▪ Foster spontaneous, informal communication
▪ Co-locate team
▪ Assemble small groups to create solutions
▪ Small white-board meetings at desk

▪ Team rooms with color-coded graphics make it easy to

immediately grasp where a project is and is not meeting its
goals.

46
PRINCIPLE 13: TOOLS FOR STANDARDIZATION
AND ORGANIZATIONAL LEARNING
▪ Use powerful tools for standardization and organizational
learning.
▪ Integrated 3-D solids-based design
▪ Design for manufacturing and assembly (DFMA)
▪ Common parts / specifications / design reuse
▪ Simulation
▪ Enable automated, concurrent flow of information

47
STANDARDIZATION

48
49
 LEAN PD AT P&WC
The LEAN Progression…
• Reduced Lead Time (Lean Metrics)
• Facilitated communication (Load Levelling)
• Reduced Intellectual Work In Progress (Eng 6S)
• Managed capacity (Bottleneck Analysis)
• Eliminated waste (VSM)

Load Levelling

Lean Metrics Bottleneck Analysis

Eng 6s
VSM
51
 Lean Enterprise
Lean Product, Process, and
Design For Manufacturing and Assembly

INDU 6221

Dr. M. Talla
 Lean Enterprise
Understanding what lean means; lean thinking, and the 5 principles
to create Value, Value Stream, Flow, Pull, and Perfection
Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
Use lean tools to eliminate waste ➔ Lean enterprise.

production rate ➔ demand rate

Demand drives to the lean!

Lean PD, and DFMA are

integral part of Lean Enterprise.
 Lean Enterprise

Apply lean principles into product design, design

for manufacturing, and process design,
 Design For Assembly (DFA)
Design of a product for ease of assembly (i.e.
minimizing the number of operations).

DFA is a tool for design of products based on

optimization of parts for assembly.

Objective is to minimize the production cost by

focusing on:
❖ number of parts,
❖ handling and
❖ ease of assembly.
 DFM: Design for Manufacturing

Design For Manufacturing

(DFM)
DFM is the method of design for ease of
manufacturing (i.e. minimizing the complexity of
operations).

DFA is a tool for design of products based on

optimization of process for manufacturing.
Objective is to minimize the production cost by
focusing on cost-effective:
❖ materials,
❖ machines and
❖ process by minimizing the complexity of operations.
 DFMA
Design For Manufacturing and
Assembly (DFMA)
In short, both DFA and DFM focus on reducing the
production cost. Both together are called DFMA.
Design (Product and Process)
Manufacturing (Production)
Which one should be efficient?
What is the % of influence on
Price, Quality and Cycle Time?

Link
 DFA, DFM, DFMA evolution

DFA = design for assembly

DFM = design for manufacture
DFE = design for Environment
DFD = design for disassembly
DFS = design for service
DFSS = design for six sigma
DFX = design for X
 DFA, DFM, and DFMA
Both DFM and DFA aim to reduce the cost of material,
overhead, and labor.

Both aim shorten the product development cycle time.

Both DFM and DFA seek to utilize standards to reduce

cost.

DFMA method: Minimize parts, Minimize complexity,

Standardize as much! ➔ Functional Analysis of each part
➔ Categorize as Essential or Non-essential ➔ eliminate
non-essential parts.
 DFMA Analysis: Identify parts
First part is essential and important: Base part.

Non-essential parts: Eliminate as much as possible:

❖ Fasteners
❖ Spacers,washers, O-rings
❖ Connectors, leads

Avoid liquids as parts

(e.g.. glue, gasket sealant, lube)
DFMA Analysis: Identify parts
 DFMA Analysis: current design
Initial design for a motor drive assembly
DFMA Analysis: Theoretical min
 DFMA Analysis: Revised design

7 parts are kept (decided to keep the screws)

 DFMA Analysis: Design efficiency
Theoretical may not be possible under current state.
Ideal assembly time for a part is 3 sec.  This is the target

Design efficiency
Nm
 = 3*
Tma
Nm : Theoretical min no. of parts
Tma : Total assembly time of product

3 sec is ideal or min assembly time

4
 = 3* *100% = 7.5%
160
 DFMA Analysis: Design efficiency
After DFA analysis, 7 parts are kept.

Design efficiency
4
 = 3* *100% = 26%
46

Savings = 133 ¢ – 38 ¢= $0.95

Increase in design efficiency = 160/46

= 3.48 = 348%
 DFMA: Complexity factor

Complexity depends on number of parts (Np) and

interfaces (Ni) with other parts.

DFA complexity factor =  N * N

p i

= 5 * 8 = 6.325
 DFMA guidelines
1. Design for a base part or the first part large and wide to be stable.
Then, assemble sequentially top down.
2. Standardize parts…minimum use of fasteners.
3. Eliminate fasteners of design parts with self-fastening features.
4. Design parts for retrieval, handling, & insertion
5. Design quality via mistake proofing
6. Design parts with self-locating features
7. Minimize reorientation of parts during assembly
8. Design for component symmetry for insertion

9. DFMA: Minimize part count; Encourage modular design; Reduce

complexity of assembly by minimizing parts and interfaces
 Emphasize ‘Top-Down’ assemblies
Design the base part or first part to be large and wide to be
stable. Then assemble sequentially top-down.

Several ways of assembly.

Figure for example.

 Standardize parts…minimum use of
fasteners.
Standardize parts to reduce variety as much possible.
 Eliminate fasteners
Eliminate fasteners in design, or use self-fastening features
Ford discovered that 80% warranty calls were resulted
from loose or incorrect fasteners in cars they serviced.
Rule of thumb: If 1/3 of components are fasteners, then
assembly logic cannot be justified.

Figure: Roll-bar design

What % of Cummins engine are fasteners?

Engine Type Number of Number of Percent
Components Fasteners Fasteners
B Series, 6 Cyl 5.9L 1086 436 40%
B Series, 4 Cyl 3.9L 718 331 46%
C Series, 8.3L 1111 486 44%
 Fastener Cost

Select cheaper fasteners in the design. Increase in cost is

due to time and tooling required.
 Design to allow assembly in open
spaces
Design parts for easy handling and insertion: Open space.
 Design quality: Mistake proofing
Don’t allow mistakes in assembly:
❖ Cannot assemble wrong part
❖ Cannot omit part
❖ Cannot assemble part wrong way around.
Use color coding
Visible part numbers and avoid mistakes; e.g. 6, 9 (Six, Nine? instead)
 Design parts with self-locating
features
Needless to explain how important this feature is.
 Minimize reorientation of parts

Higher symmetric reduces reorientation time.

 Several other tips

There are so many guidelines beyond the scope of this

course.

However, the objective is to reduce the assembly time,

easy assembly, and mistake proof.

Design Experts should create a custom set of tips for a

given product and manufacturing process.
 Cost Of Goods Sold (COGS)
COGS (Cost Of Goods Sold) includes the direct material
cost, direct labor cost, and manufacturing overhead.

Manufacturing overhead, a.k.a. factory overhead or

production overhead is the factory burden for operating. It
includes the costs incurred in the factory, other than the
costs of direct materials and direct labor.
Factory overhead is often classified as an indirect cost.
Sales & Admin operations are not included in the factory
overhead.
 Cost Of Goods Sold (COGS)

Fixed Factory overhead cost includes: Depreciation,

Property taxes, Property insurance, Salaries of Admin.

Variable Factory Overhead cost includes: Electricity,

Heating, Water, Indirect Materials, Indirect Labor.

Accounting assigns or allocates factory overhead cost to

each of the units produced. It’s a challenging task because
there may be no direct relationship.
 Financial Analysis
Order received Pay cost $ Receive $
from to the Deliver to the from the
the supplier supplier customer customer

T3 T2

T1

Tcost-to-cash = T1 +T2

Tcash-to-cash =T1 +T2-T3

Ideally a firm should target for 0 or even negative (e.g. Dell) cash-to-cash cycle
 T1, T2, T3

T1 = I/R = Average WIP (in $) / COGS ($)

T2 = I/R = Average Receivables ($) / Net sales ($)

T3 = I/R = Average Payables ($) / Purchased goods ($)

COGS = Direct materials (i.e. Purchased goods) + Direct

Labor + Factory OH
 Productivity
Productivity is a measure of efficient use of resources, usually
expressed as the ratio of output to input.
Partial or Specific measure in units per “measure”.
Multi-Factor measure or Total measure is in units/$.
Outputs
Productivity =
Inputs
Partial Output  units  Output  units  Output  units 
 ; ;
measure Labour  L - hour  Machine  M - hour  Energy  kilowatt - hour 
Multifacto r Output  units  Output  units 
: ;
measure Labour + Machine  $  Labour + Material + Energy  $ 
 
Total Output  units 

measure All inputs used to produce output  $  31
 Example: Computing Productivity

Determine the Productivity for the following cases:

(a) 4 workers installed 720 square yards of carpeting in 8 hours.

Solution:
Productivity = 720 / (4 * 8) = 22.5 yards per worker hour

(b) A machine produced 68 usable pieces in 2 hours.

Solution:
Productivity = 68/2 = 34 pieces/hour

32
Specific Productivity and MFP

33
 Example: MFP
In the same example: Suppose each unit is sold at $10, then
what is MFP?
MFP = 0.29 (units/$) * $10 ($/unit) = 2.90
*** This particular MFP is “unit-less” measurement ***

Suppose we hire very “efficient” workers who can complete

the same work in 350 hours, what is the MFP with the same
labour rate of $9 per hour?
MFP = 10000/(350 * $9 + $5000 + $25000) = 0.3017 units/$
= 0.3017 (units/$) * 10 ($/unit) = 3.017 34
 Example: Efficient Labor
However, we have to pay higher wages to the efficient workers!
How much extra wage, can we pay without reducing the original
productivity with these 350 efficient workers?
Solution:
Let x be the wage of an efficient worker.
MFP = 10000/(350 * x + $5000 + $25000) = 0.29 units/$
101.5 x + 8700 = 10000
x = $12.81

Extra by $3.81 to each efficient worker results the same productivity.

35
 About Productivity
Productivity growth is a key factor in a country’s
standard of living.
Labour productivity is still the main measure used to
gauge the performance of individuals and plants.
Wage and price increases not accompanied by
productivity increases tend to create inflationary
pressure on economy.
Because of the large amount of trade with US, it is very
important in Canada not to lose ground on productivity.
36
Lean Enterprise
5S and Workplace Performance

INDU 6221

Dr. M. Talla
 Lean Enterprise
 Understanding what lean means; lean thinking, and the 5 principles
to create: Value, Value Stream, Flow, Pull, and Perfection
 Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
 Use lean tools to eliminate waste  Lean enterprise.

 production rate  demand rate

 Demand drives to the lean!

 5S is one of the main tools

of the Lean Enterprise
 What is 5S?
 5Sis a tool for a Lean Enterprise  5 Tips for improving
the workplace performance.

5Japanese words for how to maintain workplace, or

mainly the factory floor.

 5Stool can be used everywhere  Manufacturing or

Service.

 5Sis also the foundation for Continuous Improvement (CI)

and Lean implementation.
https://www.youtube.com/watch?v=dvY3uPZ4jJw
 What are 5S?
 5S  5C  CANDO
 5S as a philosophy

 5S should be embraced by the entire organization.

 5S is not a choice but 5S should be the philosophy.

 5S is a team effort. 5S should be the culture!

 Without 5S, an enterprise encounters waste!

 Waste if you ignore 5S
 Ifyou ignore 5S  Clutter everywhere on floor.
 Wasted Time for finding a right tool or materials.
 Poor work flow due to obstacles and clutter 
Inefficient work or poor productivity.
 Over ordering  More WIP by not able to find.
 Over production  More WIP by not able to find.
 Damaged goods or materials or tools
 Poor housekeeping  Poor image  Loss of
goodwill  Loss of customers
 5S + Safety = 6S
 Untidy workplace  Safety hazard to employees.
 Cluttered workplace  Fire hazard
 Obstacles  more accidents  Injury
 Contamination  Health hazard.
 Slippery floor?
 Helmets? Safe working area, etc.
+
 More Employee care? Health? All experts of one
project shouldn’t travel by the same flight, or car.
https://www.youtube.com/watch?v=mCrZ5E6Iv9Q
 5S + Safety + Support/Maintenance
= 7S
 Reduce variability and unplanned downtime.

 Reduce disruptions (equipment break-downs, poor

quality, schedule changes, late deliveries, etc.)

 Reduce uncertainties to help reducing the setup

and lead times.
 1st S: Seiri = Sort, Clear out,
Cleaning up (CANDO)
 Keep at workplace all items that are needed daily.
 Decide what you need, Remove unnecessary clutter: Tools,
Gauges, Materials, etc. that are not needed for daily use.
 Dispose all broken. White elephant sale: Items not needed.
 All employees should use Red and Yellow labels
 Sort out all items. Keep all items that are used few times in
month in boxes with Yellow tagged. Keep all items that are
used few times in a year in boxes with Red tagged.
 Each box should be numbered: R1, R2, R3…; Y1, Y2, Y3..
 Maintain a Spread sheet file with details of items and
quantities, box numbers.
 1st S: Seiri = Sort, Clear out,
Cleaning up (CANDO)
 Store the boxes: Yellow(closer); Red (farther).

 When any item is retrieved, update the spread-sheet and

date of retrieval, a YTD count of retrievals.

 Once a year, check the spread-sheet if Yellow label boxes

can be retagged to Red.

 Ifa box with “Red” tag is not touched for 2 years in a row;
dispose or conduct yearly white elephant sale.
 1st S: Seiri = Sort, Clear out,
Cleaning up (CANDO): Red tag system

https://www.youtube.com/watch?v=kqlUZ1pyins
 2nd S: Seiton = Straighten (or Simplify),

Configure, Arrange (CANDO)

 After 1st S, We are left with items that are needed daily.

 Life is simple! Configure a place for each item  Closer

to its usage.

 Arrange for easy retrieval. Use Labels.

 No need to search for an item.

 We will know where to find an item! We save a lot of time!

 3rd S: Seiso = Scrub (or Shine or Sweep),

Clean/Check, Neatness (CANDO)

 Create a spotless workplace: Should pass an inspection!

 Identify
and eliminate causes of dirt and grime
 Sweep, dust, polish and paint

 Divide areas into zones

 Define responsibilities for cleaning

 Toolsand equipment must be owned by an individual

 Focus on removing the need to clean
 4th S: Seiketsu = Standardize,
Conformity, Discipline (CANDO)
 Create a standard system for first 3S es

 Develop procedures, schedules, practices, follow up etc.

 Continue to assess the use and disposal of items

 Regularlyaudit using checklists, spreadsheets and

measures of housekeeping

 Real challenge is to keep the workplace clean

 5th S: Shitsuke = Sustain ( discipline),
Custom & Practice, Ongoing improvement (CAANDO)

 Means inoculate courtesy & good habits

 Driving force behind all 5S

 Deming’s point number 1: Constancy of purpose

 Make it a way of life; Part of health and safety

 Involvethe whole workforce

 Develop and keep good habits
https://www.youtube.com/watch?v=-P9AgYaKjso
Lean Workplace
 Lean Enterprise
Kaizen: Continuous Improvement
(Plan, Do, Check, Adjust: PDCA)

INDU 6221

Dr. M. Talla
 Lean Enterprise
Understanding what lean means; lean thinking, and the 5 principles
to create: Value, Value Stream, Flow, Pull, and Perfection
Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
Use lean tools to eliminate waste  Lean enterprise.

production rate  demand rate

Demand drives to the lean!

Kaizen is one of the main tools

of the Lean Enterprise
 What is Kaizen?
Kaizen is a Sino-Japanese word. (Chinese & Japanese)

Kai means change; Zen means for better.

Kaizen is the “change for better” or continuous
improvement.

Mr. Sakichi Toyoda, the founder of Toyota successfully

implemented Kaizen events in TPS.

World embraced Kaizen!

Mr. Sakichi Toyoda

 What is Kaizen?
Kaizen is one of the five principles of Lean Enterprise.
Which one? Perfection.

Perfection in an enterprise is achieved via Kaikaku

(radical improvement) + a series of Kaizens (small
improvements).

Kaikaku is for crisis situation; as a reactive measure.

Kaizen is for normal situation; as a preventive measure to

“wastes” and to achieve continuous small improvements.
 What is Kaizen?
Kaizen is not an option; but it should be the policy matter.
Kaizen applies to all processes of an enterprise; so it’s one
of the main tools of a lean enterprise.
Kaizen can focus on reducing or eliminating waste thereby
improving productivity, quality, time to make, profits, and
customer satisfaction.
A Kaizen is conducted as an event, involving workers and
quality experts.
Employees (collectively) are the best actors and the best
judges in conducting the Kaizen events.
And improvements are absorbed into the process.
Lean, Kaizen, and Continuous Improvement
 Kaizen: Who? Where? When?

Kaizen is for everyone, everywhere, and everyday!

 What is Kaizen Event?
Kaizen is often conducted as an event (1 to 5 days long)
and absorbed into the process, following the event.

Kaizen focuses on a particular process for improvement;

e.g. a kaizen event for SMED, or DFMA, or 5S, Value
stream mapping, etc.

Kaizen needs a direction by quality experts, otherwise it

may not result into the expected results.
A quality expert acts as the Kaizen leader, and all workers
are actors.
What is a Kaizen Event?
 What is Kaizen Event?
All improvement activities should be aligned to the
company policies.  Prepare a business case for Kaizen
event!
Business case for a Kaizen can be:
❖ Reduce setup time or changeover time
❖ Improve workplace performance
❖ Increase delivery performance
❖ Reduce inventories
❖ Reduce machine failures
❖ Eliminate bottlenecks
❖ Etc.
Business case presents: current state, future state, cost and
benefit  Motivation to senior management buy-in!
 What is Kaizen Event?
The goal of a Kaizen should be SMART
❖ Specific, Measurable, Actionable, Realistic, and Timely.

Goal should be aligned with company policy.

Plan a Kaizen event with a diverse team (avoid like

minded team members) that actually brainstorms better.
Team must include direct workers of targeted work.

Business case presents: current state, future state, cost and

benefit  Motivation to senior management buy-in!
 Steps of Kaizen Event
1. Identify the improvement: 5S, SMED, DFMA or ?
2. Select the team and Train them.
3. Document current state and identify a waste

4. Identify small improvement

5. Make change for improvement: PDCA methodology
6. Document improvement
7. Standardize the process, i.e. absorbing the improvement
8. Repeat the steps 4-7, until the goal is achieved.

9. Present to senior management and Celebrate the success

 Kaizen - PDCA
Use PDCA methodology for each improvement iteration

Plan a change
Do
Check
Act or Adjust
 Repeat PDCA until target goal is achieved.

Another version of PDCA is: Problem finding, Display,

Clear, Acknowledge!
Learn-Lean Kaizen Board
 Kaizen Blitz
Kaizen event is sometimes referred to as Kaizen Blitz

Kaizen means improvement; Blitz means lightning fast!

Kaizen Blitz means: rapid improvement.

Kaizen event results into an improvement just in 1-5 days

of effort.

Kaizen Blitz  Motivates management!

 Productivity Kaizen
Productivity = Output / Input.
Improvement  Increase output or decrease input.

Partial Output Output Output Output

measures Labor Machine Capital Energy

Multifactor Output , Output

measures Labor + Machine Labor + Capital + Energy

Total Value of Goods or Services Produced

measure Value of all inputs used to produce them
 Kaizen Event: Typical schedule
Monday Tuesday Wednesday Thursday Friday

7:30 AM Preparation / Group Meeting Preparation / Group Meeting

8:00 AM Introduction and Training Report out Preparation

Kaizen Activity Kaizen Activity

9:00 AM
Kaizen Activity Report Out - Plant and Senior
Leadership / Sametime
10:00 AM Meeting

Kaizen Trial Kaizen Trial

11:00 AM Kaizen Trial
Report Out follow-up

12:00 PM
Travel Lunch Lunch Lunch

(Pre-Event meeting with

1:00 PM
Facilitators/Team Leaders)

Kaizen Activity Kaizen Activity

2:00 PM Verification and Final
Implementation

3:00 PM Travel

Kaizen Trial Kaizen Trial

4:00 PM Report out Preparation

5:00 PM
Daily Summary Daily Summary Daily Summary

6:00 PM
Kaizen: A focused goal inline
with mission or policies
There are 5 basic steps:

• Identify the business case.

• Set goals: Time, Quality, Performance?

• Select the team.

• Collect baseline data.

• Plan to support the Kaizen activity.

 Kaizen: Follow a methodology
Kaizen
• is a tool to rapidly improve work as part of the PDCA cycle
• is a tool for implementing Rule 4 (continuous improvement) of the Rules-In-Use
• goals must align with the business objectives

2. Design 3. Do
(Plan)

1. Customer
Needs
5. Improve 4. Feedback
(Act) (Check)

Meeting Customer Needs:

• Internal/External
• Shareholders
• Employees
• Community
Kaizen: Use a report format
 Kaizen: Use a report format
The Standard Work elements of a Kaizen are:
Adjust
Do It Again Celebrate
Document
Start Reality
Make this
the Standard
Identify
Waste

Results:
Measure Results
A new way of work Check

Plan
Countermeasures
Reality Make Changes Verify Change
Check DO
 Kaizen News Collector
KAIZEN NEWSPAPER PLANT LOCATION:

TEAM: ____________________________ REPORT-OUT DATE:

BLACK BELT RESPONSIBLE:

% Complete
(Double Click
Lead
No. Problem/Issue/Opportunity Activity Impact Cost
Time
Total Owner Due Date Revised Date on Dial to
Change as
Required)

See Rating Scale for Details

1 0

2 0

3 0

4 0

10

11

12

13

14

15

16

17

18

19

20

21

22

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 Kaizen Event: Celebrate
Each Kaizen event is an accomplishment.

Opportunity to celebrate and be proud of improvement.

Motivated employees, management, and customers!

Happy customers  More business  More opportunity

to do better!

Win, Win, Win situation!

Win (Employees  more pay), Win (Management), Win (Customers  Price, Quality) !
 Key Success Factors to Kaizen
Management support

Get everyone involved, especially the workers

Complete all actions on time.

Simulate or Implement the change and observe the

improvement.

Quantitative measure to the improvement. Keep

management informed of improvements!
Lean Enterprise
Just In Time, Kanban system
Lean Operations

INDU 6221

Dr. M. Talla
 Lean Enterprise
Understanding what lean means; lean thinking, and the 5 principles
to create: Value, Value Stream, Flow, Pull, and Perfection
Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
Use lean tools to eliminate waste ➔ Lean enterprise.

production rate ➔ demand rate

Demand drives to the lean!

JIT, Kanban, Visual Controls,

and Heijunka for Lean Enterprise
Lean Terms: Jidoka, JIT, Kanban
 What is JIT?
Just-in-time (JIT) manufacturing, a.k.a. JIT production
is the methodology of Toyota production system (TPS).
JIT aims at eliminating the wastes; mainly to reduce WIP.
JIT also aims at reducing flow times within production
and response times from suppliers and to customers.
Batch or Flow? Batch: EOQ or EPQ? ➔ EPQ batch !
Production rate (p) > demand rate (d) ➔ inventory (Imax)
Production rate (p) < demand rate (d) ➔ shortage
p = d ➔ Just-In-Time ➔ Continuous flow production!
Improve JIT: Pull, Visual signals, Kanban, Heijunka!
Just In Time
 MRP vs. JIT
Both MRP and JIT are manufacturing planning systems.
JIT is a repetitive small batch production system. MRP is
a batch production system.

MRP focuses on “dependent inventory (e.g., parts) ” whereas

JIT aims at “independent inventory (e.g., finished goods) ”.
JIT is a simpler system. MRP is a complex system.

MRP relies on computer-based backward component

scheduling whereas JIT relies on visual coordination.
 What is JIT?
Several definitions for JIT: Focus on Vendor, Customer,
Flow time, Inventory, etc.

Alternate terms for JIT manufacturing:

❖ Motorola'schoice was short-cycle manufacturing (SCM).
❖ IBM's was continuous-flow manufacturing (CFM), and
demand-flow manufacturing (DFM).

JIT manufacturing ➔ Lean manufacturing.

The “Toyota Production System (TPS)” follows both JIT

and lean manufacturing.
 The Goal of JIT
To achieve a continuous workflow using minimal
resources, producing only what is needed, therefore
eliminating wastage.
Ultimate benefit: Substantial reduction in the amount of
working capital related to inventories, i.e., raw materials
and finished products, and associated human resources.
Final goal is effective finance management.

JIT or Lean operations: eliminate waste, remove

variability, and improve throughput.
 JIT/Lean operations
Eliminate unnecessary direct/indirect waste: TIMWOOD
❖ Small impact. Big impact. ➔ eliminate waste

Reduce variability: ➔ remove variability

❖ Disruptions (equipment break-downs, poor quality, schedule
changes, late deliveries, etc.)
❖ Uncertainties to help reducing the setup and lead times.

Achieve smooth and rapid flow of materials through the

system. Reduce flow time. ➔ improve throughput
JIT focuses on identifying the waste and on reducing it.
 Eliminating the Waste
Eliminate the waste in two-fold: Big & Small

Big JIT – broad focus; big impact

❖ Vendor relations
❖ Human relations
❖ Technology management
❖ Materials and inventory management

Little JIT – narrow focus; reasonable impact

❖ Scheduling materials
❖ Scheduling services of production 8
 JIT
McDonalds Example

JTM

9
JIT and competitive advantage
JIT and competitive advantage
 JIT: Vendor Relations
JIT partnerships exist when a supplier and
purchaser work together to remove waste and
drive down costs
Four goals of JIT partnerships are:
❖ Removal of unnecessary activities
❖ Removal of in-plant inventory
❖ Removal of in-transit inventory
❖ Improved quality and reliability
JIT Partnerships
 JIT Building Blocks
JIT focuses on product design, process design,
personnel/organizational elements, manufacturing
planning and control.
Product Design – Standard or Well-known model
❖ Use standard parts and modular design, quality product.
❖ These speed-up the production and avoid disruptions.
Process Design – Tailored to produce small batch
❖ Small lot sizes, Setup time reduction, Manufacturing cells,
Limited work-in-process, Quality improvement, Production
flexibility, Little inventory storage
14
 Process Design
Advantages of small lot sizes: Reduced inventory, Less rework,
Less storage space, Problems are more manageable, Increased
product flexibility, and Efficient use of resources
Setup time reduction: Small batch production offers an
opportunity to adapt to new technologies, re-design, re-setup,
and training. Important to reduce setup time.
Manufacturing cells: JIT system contains a series of product
specific workgroups (flexible manufacturing cells - FMC, or
work-shells). Advantages are high utilization of equipment, high
specialization, high cell efficiency, etc.
Limited work-in-progress inventory as a result of small lot
sizes, multiple manufacturing cells, and small lot sizes.
15
 Process Design (contd.)
Quality improvement: Defects during production disrupt the
orderly flow of work. JIT uses autonomation or Jidoka
(automatic detection of defects during production) sources.
Production flexibility: Reduce downtime by reducing
changeover time, Use preventive maintenance to reduce
breakdowns, Cross-train workers to help clear bottlenecks,
Reserve capacity for important customers.
Little inventory storage: Deliveries from suppliers directly go
to production floor; Finished goods are shipped directly
eliminating the need for storage or requiring a very little
storage. Advantages are plenty: Less carrying cost, Less rework
in case of defects, etc. Primary disadvantages is the lost
business opportunity when order sizes the production.
16
 Personnel/Organizational elements
Workers as assets: Motivated workers produce more.
Cross-trained workers are the saviors of crisis situations as they
can be mobilized to the part of process where needed.
Continuous improvement by identifying the problems and
solving them. Workers in JIT system are trained well. JIT uses a
light system called andom (Japanese word), which is a system of
lights at each workstation to signal problems.
Cost accounting: Tracking the costs of production, Activity-
based costing closely reflects upon the actual overhead
consumed by a particular job or activity.
Leadership: Managers should be contributors/leaders , but not
messengers or commanders.
Andon System 17
 Manufacturing Planning and
Control
Major elements of manufacturing planning are:
❖Level loading – Batch Sizing
❖Pull systems – Moving inventory as per receiver need
❖Visual systems – Message signals receiver/sender
❖Close vendor relationships – Tell Requirements, To
reduce LT, improve Q
❖Reduced transaction processing– Too many batches, so
❖Preventive maintenance – Keep spares, maintain
equipment, etc. to minimize outages.
18
Inventory hides production
problems Excess Inventory: hides problems

Inventory level

Process
Scrap downtime

Setup Quality
time problems

Late deliveries
Reduce Inventory ➔ Expose
production problems ➔ Fix!

Inventory
level

Process
Scrap downtime

Setup Quality
time problems

Late deliveries
 Pull Systems
Push and Pull systems are different approaches to move
work output through a production process.
Push system moves the output of a workstation to the
next workstation, or to the inventory if it’s final
workstation. It’s a traditional approach.
In a Pull system, a workstation pulls the output of
preceding workstation, as needed.
JIT uses pull system where each workstation learns to
speed-up or slow-down its production and aim at Just-
In-Time production at workstation level.
21
 Visual Systems
In Pull system, workstation produces as per the demand
of next workstation.

Indicating the demand of a work station to the preceding

workstation is an important task. E.g. Shout, Wave, or
Telephone, Written message or Kanban (Japanese word
for visible-record or signal) card.
Two Groups of Visual signals: Display type, Control type
In Kanban system, a card requesting the supply parts.
The card is attached to the container and sent to the
preceding station to replenish the supply of parts. 22
 Production Leveling: Heijunka
Heijunka is a technique for reducing the Mura (unevenness)
which in turn reduces muda (waste). A.K.A. Production
leveling, or production smoothing. ➔ It’s a lean tactic!
It’s vital for production efficiency in TPS (Toyota Production System)
and lean manufacturing. The goal is to produce goods at a
constant and predictable rate.
Where demand is constant, production leveling is easy,
but where customer demand fluctuates, two approaches
have been adopted: 1) demand leveling and 2) production
leveling through flexible production.
Minimize fluctuation at least in the final assembly line.
(Toyota's final assembly line never assembles the same automobile model in a batch.) 23
 Production Leveling: Heijunka
Level production is by assembling a mix of models in
each batch and the batches are made as small as possible.
Long changeover motivates mass production. Shorter
changeover times open up opportunity to Heijunka.
In the Toyota Production System die changes (changeovers)
are made quickly (single-minute exchange of dies).

In the 1940s changeovers took two to three hours. In the

1950s, they dropped from one hour to 15 minutes. Now
they take three minutes or less.
24
 Production Leveling: Heijunka
Provide level capacity loading (heijunka)
Determine a mixed model sequence:
1. Determine due times for each unit of each model so the units of the
model are evenly distributed during the day
2. Sequence the units of all models based on their due times

if daily demand is n for a product or model, the due

times will be:

25
 Summary of JIT goals and
building blocks
Ultimate A
Goal balanced
rapid flow

Supporting Reduce setup

Goals and lead times
Eliminate disruptions Eliminate waste
Make the system flexible Minimize inventories

Product Process Personnel Manufactur- Building

Design Design Elements ing Planning Blocks

26
 Converting to a JIT system
Get top management commitment
Decide which parts need most effort to convert,
Identify the batch sizes in a level loading method
Obtain support of workers and train them
Start by trying to reduce setup times
Gradually convert operations
Convert suppliers to JIT
Deal with obstacles like management or workforce
or suppliers, who may resist JIT. 27
 JIT in Service Organization
JIT was developed in manufacturing sector but can also
be applied to services sector.
The basic goal of the “demand flow technology” in the
service organization is to provide optimum response to
the customer with the highest quality service and
lowest possible cost.
❖ Eliminate disruptions
❖ Make system flexible
❖ Reduce setup and lead times
❖ Eliminate waste
❖ Minimize Work-In-Process
❖ Simplify the process 28
Lean Enterprise
Toyota Production system

INDU 6221

Dr. M. Talla
 Lean Enterprise
Understanding what lean means; lean thinking, and the 5 principles
to create: Value, Value Stream, Flow, Pull, and Perfection
Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
Use lean tools to eliminate waste ➔ Lean enterprise.

production rate ➔ demand rate

Demand drives to the lean!

TPS is a lean system.

Toyota is a lean enterprise.
 Why Toyota? What is TPS?
Toyota is a lean enterprise at mega scale!
Revenues (2014): Toyota $252b, GM $156b, Ford $144b, Chrysler $83b
Before 2009, Toyota revenues > the big Three combined
Toyota faced quality problems recently! Went down!

Imagine the impact of quality, on revenues!

Still, Toyota is biggest lean enterprise, and the TPS is the

best production system. ➔ triggered Lean revolution!
TPS is popular for operational excellence! Proudly
presented as “The Toyota Way!” 14 Principles philosophy
 The Toyota Way!
Four Principles (“4P”) model
❖ Philosophy (Strategic or Long-term thinking)
❖ Process (eliminate waste) Kaizen
❖ People and partners (Respect, Challenge them to
achieve more, Grow leaders)
❖ Problem-solving (Continuous improvement and
learning) at source: Genchi genbutsu means “go
and see”! Go to Gemba means “real workplace”,
and observe genbutsu (real parts), and gather
genjitsu (real facts)! ➔ Find root cause of problem
and fix the problem at source!
 What is lean business?
“Toyota”
Lean business applies 5 principles: Value, Value stream,
Flow, Pull, Perfection.
Eliminates/Reduces Taiichi Ohno’s 7 wastes (muda).

Taiichi Ohno (the father of TPS) said “All we are doing is

looking at the timeline from the moment the customer
gives us an order to the point when we collect the cash.
And we are reducing that timeline by removing the non-
value-added waste.”
As Taiichi Ohno said, “Progress cannot be generated
when we are satisfied with existing situations.”
In other words, continuously striving for excellence!
 TPS philosophy
“Identify activities that add value to raw material and get
rid of everything else.”

Driven by demand! The best thing to idle a machine is to stop

it if there’s no demand but use it for others that has demand!

Don’t mass produce to keep workers busy, but use manpower

for production to match the demand, and selectively add and
substitute overhead for direct labor.

Use information technology; however, use manual process,

although automation seems to justify its cost in reducing your
headcount! Manpower is an asset!
 Humble beginnings!
Mr. Sakichi Toyoda, “the King of Inventors”, grew up in
predominantly farming community in late 1800s. Japanese
government promoted weaving industry.
By 1894, Sakichi began to produce manual looms that were
cheaper but of better quality (more features and less failures).
Then, he started on his own to develop power-driven loom,
and started “Toyoda Automatic Loom Works”. The approach
of learning and doing yourself became integral part of TPS
(genchi genbutsu).
His inventions included a special mechanism to automatically
stop a loom whenever a thread broke – building in quality as
you produce (jidoka or poka-yoke).
 Humble beginnings! Evolved!
The “mistake-proof” loom became Toyoda’s popular
model. In 1929, his son Kichiro, negotiated the sale of
patent rights to Platt Brothers of England for £100,000.
In 1930, these funds were used to start building the
Toyota Motor Corp.
Kichiro’s contribution to the Toyota philosophy was JIT.
What is JIT? – a compromise between the Ford’s idea of
assembly line (mass production), and US supermarket
system of replacing products on the shelves just in time
as customer purchased them.
 History of Toyota
Post-WWII, rampant inflation killed customer demand.
Cash-flow problems ➔ Pay cuts ➔ 1600 workers were
asked to “retire voluntarily.” ➔ worker strikes ➔
Kichiro’s resignation ➔ Eiji Toyoda became president.
Eiji’s main contribution was – the leadership towards
development of the TPS.
Eiji hired Taiichi Ohno as the plant manager and asked
him to improve Toyota’s manufacturing process to
compete with Ford.
Taiichi Ohno in action!
 History of Toyota (contd.)
Taiichi Ohno was impressed with Ford’s (book) philosophy
of eliminating waste. Ford itself didn’t seem to practice it
Took idea of reducing inventory by implementing “pull”
system like that of US supermarkets.
“Pull” system was implemented with Kanban cards.
Ohno attended Deming’s lectures in Japan about quality
and productivity. ➔ “meeting and exceeding customer
expectations!”. Internal and external customers! ➔
Customer demand became the significant expression for
JIT ➔ in a pull system. Deming’s PDCA cycle led to Kaizen.
The Toyota Production System
 Ford vs. Toyota ➔ Mass vs. Lean

Ford’s mass production system focused on producing

huge quantities of limited number of models. Ford’s cash!
Toyota needed a system to make low volumes of different
models using the same assembly line. ➔ Lean.
Ford focused on competing on price in a large market.
Toyota needed to turn cash around quickly, focused on
variety and price (by lean approach).
Ford’s automation depended on economies of scale ➔
replace people with m/cs.
Toyota focused on employees; Quality and Price!
 Quality centered TPS
Business world got the quality religion from Deming,
Juran, Ishikawa and other quality gurus. Heroes of Q!

Toyota developed the TPS which focused on speed in the

supply chain:
“Shortening lead time by eliminating waste in each step of
a process leads to best quality and lowest cost, while
improving safety and morale.”

Toyota demonstrated that focusing on quality actually

reduced cost more than focusing only on cost alone.
 The Toyota Way! 14 Principles
Section I – Long-term philosophy
Principle 1: Base your management decisions on a long-term
philosophy, even at the expense of short-term financial goals.

Section II – The Right processes will produce the right

results
Principle 2: Create continuous process flow to bring problem to
the surface.
Principle 3: Use “pull” system to avoid overproduction.
Principle 4: Level out the workload (heijunka). (work like a
tortoise not the hare.)
Principle 5: Build the culture of stopping to fix problems to get
quality right the first time.
 The Toyota Way! 14 Principles
Principle 6: Standardized tasks are the foundation for continuous
improvement and employee empowerment.
Principle 7: Use visual control so no problems are hidden.
Principle 8: Use only reliable, thoroughly tested technology that
serves your people and processes.
Section III – Add value to the organization by developing
your people and partners
Principle 9: Grow leaders who thoroughly understand the work,
live the philosophy, and teach it to others.
Principle 10: Develop exceptional people and teams who follow
your company’s philosophy.
Principle 11: Respect your extended network of partners and
suppliers by challenging them and helping them improve.
 The Toyota Way! 14 Principles
Section IV – Continuously solving root problem drives
organizational learning
Principle 12: Go and see for yourself to thoroughly understand the
situation (genchi genbutsu).
Principle 13: Make decisions slowly by consensus, thoroughly
considering all options, implement decisions rapidly.
Principle 14: Become a learning organization through relentless
reflection (hensei) and continuous improvement (kaizen).

JIT, Lean, 5S etc. are just tools that enable quality and
productivity. TPS is much more than that! Creative!
The House of TPS
 The House of TPS
Two main pillars:
1. JIT (the most visible and highly publicized
characteristics of TPS)
2. Jidoka (never letting a defect pass to the next station;
and freeing people from machines)

Base: Heijunka – Leveling out production schedule for

both volume and variety. A leveled production keeps the
system stable with minimum inventory. Big spikes in the
production of certain variety while excluding others will
create part shortages unless huge inventory is maintained.
 The House of TPS
JIT removes the inventory that hides problems that may
arise in production.
The ideal one-piece flow is to make one unit at the rate of
customer demand or takt (German word for meter).
No or low inventory exposes the production problems; an
opportunity to reinforce jidoka which can halt the
production with Andon. The production line restarts once
workers resolve the problem.
Less inventory and the Andon forces urgency among the
workers.
 The House of TPS
If the same problem happens repeatedly the management
realizes the critical situation and invests in Total Productive
Maintenance, where everyone learns how to clean, inspect and
maintain equipment.
Traditional system lacks urgency, if the machine is down,
because the maintenance department schedules to fix it until the
depletion of inventory.
People are the center of the house because only through
continuous improvement can the operation ever attain the
system stability. People must be trained to see waste and solve
problem at the root cause by repeatedly asking why the problem
really occurs.
 The House of TPS
First question the TPS asks is “What does the customer
want from this process?” (both internal as well as
external customers). This defines value.
Through the customer’s eyes, we can then observe the
process and separate the value-added steps from the non-
value-added steps.
Create continuous flow; and Pull system ➔ Perfection!

This model can be applied to any process –

manufacturing, or a service.
 TPS Eliminates waste
To remove non-value added steps from a process, first
step is to map the process and then create value stream
following the actual path taken by the part in the plant.
Walk the full path yourself (genchi genbutsu).
One can draw the path on a layout and calculate the time
and distances traveled (spaghetti diagram).
Traditional cost saving focuses on value-added items and
try to improve those.
TPS focuses on the entire value stream to eliminate the
non-value adding items.
 TPS Eliminates waste: How is
TPS different?
Traditional approach focuses on identifying local
efficiencies. “Go to the equipment, the value-added
processes, and improve uptime, or make the cycle faster,
or replace the person with automated equipment.”
In TPS, large number of non-value-added steps are
squeezed out.
One way to achieve this is through cell formation
(cellular manufacturing), which should ideally result in
one-piece flow of products or services.
 Advantages of One-Piece-Flow
Builds in quality – Every operator is an inspector and works
to fix problems in station before passing them on. If defects
do get passed on, they are detected quickly and problem can
be immediately diagnosed and corrected.
Creates flexibility – If shorter lead times, more flexibility to
respond and make what customer really wants. Pushes for set-
up time reduction.
Creates higher productivity – Every easy to spot the busy or
idle station and easier to calculate the value-added work.
Frees up floor space – Because of inventory storage
reduction.
 Advantages of One-Piece-Flow
Improves safety – Smaller batches means simpler
transportation system and less accidents because of
forklifts.

Improves morale – People do high percentage value-

added work and can see the results of their work faster.

Reduces cost of inventory – Obvious!

 “Pull” to avoid overproduction
Milk example – weekly batch or daily purchase?
Next purchase triggered when you start using the only bottle of
milk that you have.
Not an example of zero-inventory, but still a pull system.
Because of demand uncertainty and lead-times, in many cases
inventory is necessary to allow for smooth production.
Hence TPS follows the supermarket model or keeping a small
amount in stock. As soon as customers take products away, they
are replenished.
Each demand instance triggers a part being pulled from upstream.
The triggering mechanism is called “Kanban” which means cards,
signboard or a poster.
 “Kanban” system
Empty bin (a kanban) is sent upstream after a demand instance.
It is a signal to refill it with a specific number of parts or send back
a card with detailed information about the part location.
Even today, one can see Kanban cards and bins moving on the
shop-floor. Instead of using sophisticated computer scheduling
techniques, this is a simple, effective and visual system of
managing and ensuring the product flow and JIT production.
Gas tank example. Toyota philosophy about kanban:
“Kanban is an organized system of inventory buffers and as per
TPS, inventory is waste, whether it is in pull system or push
system. So kanban is something you strive to get rid of.”
Toyota uses kanban to force process improvements.
 “Kanban” system (contd.)
Suppose we have four kanban cards for a particular
products: One each for four bins of products. TPS will
conduct studies in which one of the kanban cards (along
with the corresponding bin) is thrown away.
Now, if the machine breaks down, the downstream
process will run out of parts 25% faster.

The stress in the system will cause production shutdowns

and will force teams to come up with process
improvements.
 Level Production (Heijunka)
Demand uncertainty may lead to bumpy production schedule if
one-piece-flow is followed literally.
TPS realizes that strict build-to-order system will again build-up
inventory and increase waste (Muda).
Hence TPS tries to even out the production by consolidating
orders. Three-pronged approach: Elimination of –
1. Muda (non-value-added)
2. Muri (overburdening people or equipment)
3. Mura (unevenness)
Toyota achieves the combination of JIT and heijunka by
following the principle of change-to-order (not build-to-order) by
delayed customization.
 Stop production if problems
(Jidoka)
Traditional production view: “Don’t shut down the
assembly line!” The managers are judged by their ability
to deliver the numbers.
TPS view: “If you are not shutting down the assembly plant,
it means that you have no problems. All manufacturing plants
have problems. So you must be hiding problems. Please take
out inventory so that problems surface. Then you will have to
shut down the assembly line and fix the problems.”
If we continually follow this view, we can make even
better-quality products more efficiently.
 Jidoka
Jidoka is a method to detect defects when they occur and
automatically stop production so an employee can fix the
problem before the defect continues downstream.
Jidoka is also referred to as autonomation – equipment
endowed with human intelligence to stop itself upon problem.
In-station quality is much more effective and less costly than
inspecting and repairing quality problem after the fact.
Lean manufacturing dramatically increases the importance of
building things right the first time.
With very low levels of inventory, there is little buffer to fall
back on in case there is quality problem.
 Andon system
When the equipment shuts down because of a quality
problem, flags or light, usually with accompanying music,
signal that help is needed to solve the problem.
This signaling system is called the andon system.
The andon is called a “fixed-position line stop system.”
When a workstation in the assembly line signals a problem,
the production line is not stopped immediately.
The manufacturing team has until the product moves to the
next workstation to respond and address the problem, before
the andon turns red and stops the assembly line.
Andon system
 Andon system
If the problem is small enough that can be solved in the
lead-time between two workstation, 100% quality is
achieved without stopping the line.
If the problem is complex, the team leader can conclude
that the line should stop.
In TPS, the workstation detects the defects by using
countermeasures and error-proofing (poka-yoke).

Applications of andon system to service organizations

like call-center are obvious!
 Use Visual Controls
Implement 5S in workplace.
Like traffic signals – well-designed which don’t require you
to study them; their meaning is immediately clear.
Examples at Toyota:
A shadow of a tool painted on the wall to indicate the correct
position of the tool.
Outwardly pasted SOPs. (Standard Operating Procedure)
Kanban cards.
Andon signals.
Office auditing system at Toyota.
One-page reporting system.
 Lean Enterprise
Total Productive Maintenance

INDU 6221

Dr. M. Talla
 Lean Enterprise
 Understanding what lean means; lean thinking, and the 5 principles
to create: Value, Value Stream, Flow, Pull, and Perfection
 Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
 Use lean tools to eliminate waste  Lean enterprise.

 production rate  demand rate

 Demand drives to the lean!

 TPM is the core of Lean system.

TPM is proactive and preventive.
Operator is involved in TPM.
 What is TPM?
 Total Productive Maintenance focuses on proactive and
preventive maintenance to maximize the operational time
of the equipment.
 Traditional maintenance involves only mechanics.
TPM involves the operators who actually know the
machines better than mechanic. That why TPM is special!

 TPM maximizes the machine up time, reduces m/c break

downs, and increases productivity; all that with a modest
investment in maintenance.

 TQM and TPM are considered to be the key operational

activities of a holistic quality management system.
 TPM Goals

 TPM  to improve productivity!

 How? Maintain m/c like that of new! Every day!

 Zero defects, Zero breakdowns, Zero accidents
 Zero waste  Zero losses (see next slide)

 Maximize m/c uptime  Better productivity

 + Better employee morale
 Better product  Better customer satisfaction
TPM Goals: Eliminate losses
“Six Big Losses”
 TPM philosophy

 TPM encourages involvement of both operators and

management in maintenance.  Better relationship 
continuous improvement. Mngt. + Operators + Mechanics

https://www.youtube.com/watch?v=nb031_LQIHQ
 TPM philosophy

 M/C in use is better than new m/s if we can restore it to

top shape every day.

 M/C should work everyday

like on its day one!

 Fix root causes of problems.

 Maintain and improve!

 TPM Approach: OEE, TEEP
 Followa KPI: OEE (Overall Equipment Effectiveness)
 Measure OEE  Identify improvements  Implement.

 Loading (L)
 Availability (A)
 Performance (P), and
 Quality (Q)
 Overall Equipment Effectiveness (OEE) = A * P * Q
 Total Effective Equipment Performance (TEEP)

 Firstof all, a work center should be loaded, i.e. scheduled

for work; then availability; then perform with quality.
 TPM Approach: OEE, TEEP

 Loading: percentage of time scheduled to operate in a calendar year

 Loading = scheduled time / calendar time

 A work center is schedule to work 5 days a week, 24 hours/day:

 Loading = (5 * 24)/(7*24) = 71.4%

 TPM Approach: OEE, TEEP

 Availability (A): up time during scheduled time

 Availability = operating time / scheduled time

 Availability is a measure of equipment uptime, i.e. % of scheduled

time that a m/c is available to operate.
 Excludes scheduled maintenance. Includes unscheduled downtime
MTBF  MTTR
Availability 
MTBF
MTTR: Mean Time To Repair. MTBF: Mean Time Between Failures.

 A given Work Center is scheduled to run for an 8-hour shift with a

30-minute scheduled break. Took 60min for fixing m/c breakdown
 Availability = ((8 * 60 - 30) - 60 )/(8*60 - 30) = 86.67%
 TPM Approach: OEE, TEEP

 Performance: speed of work center

 Performance (Productivity) = (Parts Produced * Ideal Cycle Time) / Operating time

 A work Center is scheduled to run for an 8-hour (480 minute) shift with
a 30-minute scheduled break. A m/c breakdown lasted for 60 mins.
Actual production is 242 units which includes all good and bad units
produced. The work center is designed to produce 40 units/hour.

 Operating Time = 450 Min – 60 Min = 390 Min

 Performance (Productivity) = 242 * (60/40) / 390 = 93.08%

 TPM Approach: OEE, TEEP

 Quality: percentage of good items produced

 Quality = (items produced – defective items) / items produced

 A work Center produced 242 units in a work shift. However, 21 items

are defectives.

 Quality = (242 – 21) / 242 = 91.3%

 TPM Approach: OEE, TEEP

 OverallEquipment Effectiveness (OEE): availability,

performance and quality “put together”.

 OEE = 86.67% * 93.08% * 91.3% = 73.7%

 OEE may be applied to any individual Work Center, or rolled

up to Department or Plant levels.

 OEE tool also allows for drilling down for very specific
analysis, e.g. a part number, a shift, or any other parameter.
 Many manufacturers benchmark their industry to set a
challenging target; 85% is not uncommon.
 TPM Approach: OEE, TEEP

 Overall Equipment Effectiveness (OEE): is a measure of

effectiveness of scheduled hours.

 TotalEffective Equipment Performance (TEEP): is a

measure of effectiveness of calendar hours, i.e. 24
hours/day, 365 days/year.

 TEEP = L * OEE = 71.4% * 73.7% = 52.6%

 TEEP is a measure of bottom line utilization of assets.

 Eight pillars (strategies) of TPM
 Eightstrategies (pillars) of TPM mostly focus on proactive
& preventative techniques for better equipment reliability
1. Autonomous maintenance,
2. Planned Maintenance,
3. Focused Improvement,
4. Quality Maintenance,
5. Early Equipment Management,
6. Training and Education,
7. Safety Health Environment, and
8. TPM in Administration, a.k.a. Office TPM

Caveat: Some responsibilities of pillars partially overlap!

 Eight pillars (strategies) of TPM
Some Japanese:
 AM: Jishu-Hozen
 PM: Keikaku-Hozen
 FI: Kobetsu-Kaizen.
 QM: Hinshitsu-Hozen
 Autonomous Maintenance (AM)
(Educate operators to be autonomous)

 Maintenance mechanics are valuable asset as they attend

to both preventive and reactive maintenance.
 The need for reactive maintenance can be reduced if m/c
don’t break down  better management of mechanics.

 Operators can help this effort if they can and do maintain

their equipment on a daily basis (routine) leaving maintenance
personnel for difficult, special or emergency maintenance.
 Because the maintenance department had more time on
their hands, the team was able to focus on improving
equipment reliability or Maintenance Prevention.
 Autonomous Maintenance
 Seven steps to accomplish “Autonomous Maintenance”:
1. Cleaning and Inspection: 5S for machine. Remove fluids for inspection.
Use red tags for damaged parts, and replace them (help needed?)
2. Remove causes of contamination and improve access: Inspect
where from the dirt is coming (internal or external sources) and fix them.
3. Cleaning and lubrication standards: Above (1) and (2) set the stage
for further cleaning, lubricating, tightening, and inspect.
4. Train for general inspections: Mechanics or experts while fixing the
issues, conduct on-job training to operators, operator learn with 5Ws tool.
5. Conduct autonomous inspections: As a result of (4), operators can
become autonomous; they can inspect and fix most problems. handymen.
6. Implement visual maintenance management: Standardize
maintenance work and make it as visual as possible.
7. Continuous improvement: Maintain a database of problems and
solutions and aim at continuous improvement.
Autonomous Maintenance
 Planned Maintenance (PM)
 Includes all maintenance work that can be planned:
inspection, service, and/or replacement of parts at planned
and scheduled intervals.
 PM includes: Preventive maintenance, and Predictive
maintenance!
 Planning requires experience and record keeping.
 Record keeping subject matters:
 Battery life
 Recommended life span of parts; Frequency of usage
 Parts inspected; Repairs identified and/or repairs made
 Functionality of parts; Procedures; Cost.
 Etc.
 Focused Improvement (FI)
 Includes all activities that maximize the overall
effectiveness of equipment, processes, and plants through
elimination of losses and improvement of performance.
 Equipment should perform everyday like its best day.
 Machines do almost 100% of the product manufacturing
work; so we need m/c to be top shape.  better product.
 We gained better understanding of m/c and can maintain,
which is better than new m/c.  Focused improvement.
 Focused Improvement aims to achieve Zero Losses,
meaning a continuous improvement effort to avoid any
loss of m/c effectiveness.
 Overall Equipment Effectiveness (OEE) is the key metric
of Focused Improvement.
 Focused Improvement (FI)
 FI is not a one time, but a life time activity of m/c.
 Usage  Wear and Deterioration. FI  Total Restoration
 FI focuses on fixing the root causes of problems to
eliminate m/c break downs.
 Quality Maintenance (QM)

Management or Maintenance?  Both.

 Quality
 QM evolved into TQM. TPM embraced QM as a pillar.
 QM focuses on product and process; TPM focuses on m/c

 Materials + Machines + Manpower + Method  Product

 All Ms in good state  Good product.
 Quality Maintenance (QM)
 Quality Management  Process capability + SPC.
 Defective product? Capability problem? SPC problem?
 Problem? Investigate using Six sigma (DMAIC), or TQM
(PDCA) methodology. Use a tool.
Quality Maintenance (QM)
 Early Equipment Management
(EEM)
 EEM mandates collaborative partnership between
engineering, production, and maintenance.
 Goal is to reduce the complexity of equipment so that
production is smooth, and equipment is maintainable.
 Elements of EEM
 Design for quality assurance
 Design for maintainability
 Life cycle costing

 Engineering continuously improves equipment based on

input from production, maintenance, and finance at the
earliest opportunity.
 Training and Education

 Enhances expertise of operators and maintenance staff.

 Trainingcovers basic maintenance to operators; and

expert maintenance to mechanics.

 Operators will be self sufficient for basic tasks like fitting

nuts and bolts, axle maintenance, transmission
components, leak prevention, electrical control etc.

https://www.youtube.com/watch?v=nVPw00tSqkU
 Safety, Health, Environment (SHE)

 Aims at zero accidents

 Creates healthy, rewarding and pleasant workplace

 Safety, Health and Environment

 Equipment safety
 Work safety (method, raw materials handling, etc.)
 Environment safety (e.g. reduce noise, vibration, dirt,
prevent pollution, maintain temperature of factory, etc.)
 Promote employee health (physical and emotional)
 Promote wholesome activities (e.g. picnic, wine-cheese!)
 TPM in Admin (a.k.a. Office TPM)
 Achieve zero functional losses
 Efficient offices and work place: Jishu Hozen or AM to
keep clean work place  Standardize and Maintain!

 Conduct specific projects

 Reduce lead time for finalizing accounts,
 Improve logistics,
 Increase efficiency of purchasing and subcontracting,
 Revamp production management system,
 Etc.
 Advantages of TPM
 Increase productivity and OPE (Overall Plant Efficiency)
by 1.5 or 2 times.
 Satisfy the customers needs by 100 % (Delivering the
right quantity at the right time, in the required quality)
 Reduce the manufacturing cost by 30%.  Competitive!
 Reduce accidents. Follow pollution control measures.

 Higher confidence level among the employees.

 Keep the work place clean, neat and attractive.
 Better attitude of operators as they feel like owning m/c.
 Achieve goals by working as team. Operators with skills!!
Source: http://www.plant-maintenance.com/articles/tpm_intro.shtml
Lean Enterprise
Lean Six Sigma

INDU 6221

Dr. M. Talla
 Lean Enterprise
Understanding what lean means; lean thinking, and the 5 principles
to create: Value, Value Stream, Flow, Pull, and Perfection
Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
Use lean tools to eliminate waste  Lean enterprise.

production rate  demand rate

Demand drives to the lean!

Six Sigma need not be lean!

Lean Six Sigma adopted lean principles.
“The Latest Lean Enterprise!”
Evolution to Lean Six Sigma
(Lean tools + Six Sigma tools)
 What is Six Sigma?

Six Sigma is a quality improvement methodology for a

manufacturing or a service process.
Six Sigma is a set of techniques and tools for process
improvement by reducing the process variation.
Six Sigma attempts to identify and remove the causes of
defects (or errors) and minimize the process variability.
Six Sigma is often executed as a project or a program for
improving and sustaining process improvement.
Six Sigma is well known for process capability index
rating of 2, which results into 3.4 DPMO.
Six Sigma recommends certified professionals to practice!
What is Six Sigma?
 Six Sigma Professionals
Senior Management Level
Quality management needs organizational commitment.

Six Sigma executives and champions set the direction for

selecting and deploying projects.

Champions identify individual projects, resources and

remove roadblocks; making sure the projects are aligned
with the company’s vision, mission, goals and metrics.

Executives establish a strategic focus of Six Sigma

program within the context of company’s culture.
 Six Sigma Professionals:
Project Level
Master Black Belt: Trains and coaches Black Belts & Green Belts.
Functions more at the Six Sigma program level by developing key
metrics and the strategic direction. Acts as an organization’s Six
Sigma technologist and internal consultant.

Black Belt: Leads problem-solving projects. Trains project teams.

Green Belt: Assists with data collection and analysis for Black
Belt projects. Leads Green Belt projects or teams.

Yellow Belt: Participates as a project team member.

Reviews process improvements that support the project.
White Belt: Can work on local problem-solving teams that support
overall projects, but may not be part of a Six Sigma project team.
Aware of basic Six Sigma concepts.
 Six Sigma Methodology

The DMAIC project methodology has five phases:

Define the system, the voice of the customer and their requirements,
and the project goals, specifically.
Measure key aspects of the current process and collect relevant
data; calculate the 'as-is' Process Capability.
Analyze the data to investigate and verify cause-and-effect
relationships. Seek out root cause of the defect.
Improve the current process based upon data analysis, e.g. design of
experiments, poka yoke, or mistake proofing, and standard work to
create a new, future state process. Establish process capability after
process improvement.
Control the future state process to ensure that any deviations from
the target are corrected before they result in defects. Implement
control systems such as SPC, production boards, visual workplaces,
and continuously monitor the process.
 Six Sigma Methodology

Some companies add

Recognize step for
identifying the right
problem to work on,
thus yielding an
RDMAIC
methodology! Tools and Methodology
 Lean Six Sigma
Lean  Customer focus  Demand! Value to customer!
5 Principles, 7 Wastes (Muda), Continuous improvement!

CTQ  customer
Critical To Quality

https://www.youtube.com/watch?v=PHOppLiEG0o
Six Sigma Method!
Six Sigma Method!
 Process Capability

Design specifications (aka tolerances)

Range of acceptable values established by
engineering design or customer requirements
Process variability
Natural variability in a process
Process capability
Process variability relative to specification
Capability index: Cp: Potential; Cpk: Current
Process Capability Index

Cp: Potential capability index

Cpk: Current capability index

Process Capability Analysis
 Process Capability index

Cp >= Cpk
Cp = Cpk if the process mean is centered
between USL and LSL

Capability index should be at least 1.

Capability index value of 2 will result in to
3.4 DPMO
 Sources of Variation
y

Poor Design

Changing Needs

Measurement System

Insufficient Process
Capability

Skills & Behaviors

x
Lean Six Sigma methodology
 Value Stream Mapping (VSM)
Focuses attention on what is important to customer

Identifies all components to bring a product or

service from conception to commercialization.

Identifies and eliminate all wastes in the process.

Reduces defectives and deficiencies in the process.

Focuses on improving core competencies!

Improvement Methods and
their Impact

Define, Measure, Analyze,

Design, Verify
Lean vs. Six Sigma
Lean project focus
Lean project focus
Lean vs. Six Sigma
Lean Six Sigma
Lean or Six Sigma first?
Lean projects
Six Sigma projects
Lean Six Sigma projects
Lean Enterprise
Lean Enterprise

INDU 6221

Dr. M. Talla
 Lean Enterprise
“Lean thinking in all activities: Effectiveness and Efficiency!”
Understanding what lean means; lean thinking, and the 5 principles
to create: Value, Value Stream, Flow, Pull, and Perfection
Understanding what waste means; the 7 wastes, and major sources
Unnecessary Transportation, Inventory, Motion, Waiting, Over
production, Over processing, Defects (TIMWOOD, just for memory, not in the exam)
Use lean tools to eliminate waste ➔ Lean enterprise.
production rate ➔ demand rate
Demand drives to the lean!
Lean ➔ Improves processes via lean principles/tools
Enterprise ➔ Marketing/Sales, Operations,
Finance, R&D, Eng., HR, Accounting,
Leadership, Strategy, Execution.
“Lean Thinking: Enterprise-wide!”
 Lean Thinking Enterprise wide
“Lean thinking in all activities: Effectiveness and Efficiency!”

Lean isn’t limited to Manufacturing and Operations.

Lean’s primary objective is to eliminate waste and
streamline processes to be value added ➔ Reengineering!
Engage, Enable, Enhance, Empower!
Major drivers for success: Processes, People, and Culture!
Organization type: Functional, Projectized, and Matrix.
Major Functions: Marketing & Sales, R&D and Eng.,
Operations, Finance & Accounting, HR, IT, etc.
Senior Management, Middle and Line Management.
Culture of treating customers around: External & Internal!
Concurrent Engineering! Eliminate Silos! Info sharing!
IT improves performance at a reduced cost continuously!
 People management
“Lean thinking in all activities: Effectiveness and Efficiency!”

People contribute their knowledge to company.

People strive for excellence and perfection when they feel its
their own business! Create virtual partnership culture rather
than an employee/employer culture.
Look after employee career paths via fair policies. Otherwise,
employees look after their careers everyday!
Ensure Job security, Safety at workplace, Physical &
Emotional health of employees. ➔ “You got a future with us!”
On-job training ➔ Employee-to-employee ➔ An experienced
employee can be the best teacher!
Enhance and use the “internal” talent! ➔ min firing/hiring
Maslow’s hierarchy of human needs!
Workplace matters! Inspire! Interact! Innovate!
 Effective Reporting!
“Lean thinking in all activities: Effectiveness and Efficiency!”

Eliminate non-value added reporting structures in the organization.

KPI based reporting via IT systems rather than traditional reports.
Action oriented communication: Email, Meetings, Conferences, etc.

Productivity = Output / Input.

Performance Effectiveness: accomplish goals as a measure of output.
Performance Efficiency: accomplish goals with minimum input.
Focus on both; effectiveness and efficiency, i.e. o/p and i/p.

Monitoring & Evaluation

Leadership styles
“Lean thinking in all activities: Effectiveness and Efficiency!”

Lewin’s Research
Leadership Styles

Leadership Styles
 Leadership:
Plan to Achieve Results
“Lean thinking in all activities: Effectiveness and Efficiency!”

Set-up SMART goals: Specific, Measurable, Attainable, Relevant, Timely

Top-down approach encouraging bottom-up input for adjustments!
 Leadership:
Management By Objectives
“Lean thinking in all activities: Effectiveness and Efficiency!”

A structured process of regular communication.

Manager and workers jointly set performance objectives
that are SMART and agree upon a procedure to review.
Manager and workers jointly review results.
 21 st century Manager
“Lean thinking in all activities: Effectiveness and Efficiency!”

Attributes of a modern Manager

• Global strategist – understanding the interconnections among
nations, cultures and economies

• Master of technology – comfortable with information technology

• Inspiring leader – attracting and motivating workers to achieve high-

performance culture

• Model of ethical behaviour – acting ethically in all ways & always!

 Lean Thinking: 3 Pillars
“Lean thinking in all activities: Effectiveness and Efficiency!”

Culture!

Leadership!

People!
Lean Thinking
Lean mindset for a winning strategy! Pizza?
 Lean Marketing & Sales
“Lean thinking in all activities: Effectiveness and Efficiency!”

Identify customer needs. Define “Value” from customer perspective!

Propose products. Participate in cost-benefit analysis.
Participate in concurrent re-engineering.
Customer Relationship Management. Customers and Suppliers to be
part of product and process design. Optimize customer waiting time!
Right Advertisement strategy that works.
Right Pricing and Promotion strategy that works.
Market segmentation and Differential pricing strategy.
Pricing amid Cancellations and Overbooking.
Market recognition and Branding strategy.
“Lean thinking in all activities: Effectiveness and Efficiency!”
Forecast customer demand. Turn demand to sales! Be honest!
Lean Marketing
 Lean Accounting
“Lean thinking in all activities: Effectiveness and Efficiency!”

Eliminate non-value activities in the enterprise.

Use IT systems for accounting to be able to eliminate/reduce errors.

Eliminate unnecessary reports. Results focused executive reports!

Financial accounting, Cost accounting, P/L and Balance sheet

What is Lean Accounting?

 Lean R&D
“Lean thinking in all activities: Effectiveness and Efficiency!”

Product Research: Identify new products that add value to society!

Products/Services viable! Within company budgets! Be engineered!

Products/services focused to business mission, vision, and values!

R&D strategy aligned to Business Strategy! Eliminating waste!

Adding value to individual customers ➔ value to society!

Lean six sigma methodology can be applied to R&D process!

Lean R&D
 Lean Engineering
“Lean thinking in all activities: Effectiveness and Efficiency!”

We already looked at several methodologies of lean engineering!

Lean Product Design, Process Design, Concurrent Engineering!

Teaming with customers and suppliers to add value! Eliminate waste!

Lean processes are both efficient and effective!

Apply Lean Principles, Lean Thinking, DFMA, SMED, TPS, TPM,

PDCA, Lean Six Sigma, etc. all that we looked at so far!

Lean engineering and timely re-engineering to take advantage of

developing technologies! Kaizen and Kaikaku!
 Lean Administration
“Lean thinking in all activities: Effectiveness and Efficiency!”

We may find during value stream mapping that some administrative

roles may be political and counter productive. ➔ Eliminate waste!

Train employees and transform them to contributory roles via

Management Training!

Eliminate excessive approvals. Promote 1+1 approval process.

Reduce paper-based reporting. Keep the office desks clean!

Lean Office?