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Operations Analysis and Improvement

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Title: Operations Analysis and Improvement


1
Introduction
Operations Analysis and Improvement 2009
Spring Dr. Tai-Yue Wang Industrial and
Information Management Department National Cheng
Kung University
2
Presentation
  • Asian culture has had a significant impact on the
    rest of the world.
  • Many words used in our daily languages.
  • Martial arts, religion or food.
  • Within the business environment.
  • Improvement tools (kaizen(??) tools)
  • Production philosophies such as Just-in-time.
  • Just-in-time philosophy is also known as Lean
    Manufacturing.

3
Presentation
  • Another important philosophy is the concept
    developed by a Japanese consultant named
    Kobayashi(??).
  • Based on a methodology of 20 keys leading
    business on a course of continuous improvement
    (kaizen).

4
Presentation
  • The core elements of Kobayashis concepts are
    presented in order to focus on production
    improvements.
  • In addition, a measurement standard for
    improvement results is also explained.

5
Introduction
  • Continuous improvement is a management philosophy
    based on employees suggestions.
  • It was developed in the United States at the end
    of the 19th century.
  • Many important improvements took place when this
    idea or philosophy arrived in Japan.
  • Japan was already utilizing tools such as quality
    circles.
  • When they combined these two ideas, kaizen was
    born.

6
Introduction
  • In 1926 Henry Ford wrote
  • To standardize a method is to choose out of the
    many methods the best one, and use it.
    Standardization means nothing unless it means
    standardizing upward.
  • Todays standardization, instead of being a
    barricade against improvement, is the necessary
    foundation on which tomorrows improvement will
    be based.

7
Introduction
  • In 1926 Henry Ford wrote
  • If you think of standardization as the best
    that you know today, but which is to be improved
    tomorrow - you get somewhere. But if you think of
    standards as confining, then progress stops.

8
Kaizen vs Reengineering
  • Creating an useable and meaningful standard is
    key to the success of any enterprise.
  • Businesses usually utilize two different kinds of
    improvements.
  • Those that suppose a revolution in the way of
    working.
  • Those that suppose smaller benefits with less
    investment.

9
Kaizen vs Reengineering
  • The evolution consists of continuous improvements
    being made in both the product and process.
  • A rapid and radical change (kaikaku) process is
    sometimes used as a precursor to kaizen
    activities.
  • Carried out by the utilization of process
    reengineering or a major product redesign.

10
Kaizen vs Reengineering
  • Require large investments and are based on
    process automation.
  • In the U.S., these radical activities are
    frequently called kaizen blitzes.

11
Kaizen vs Reengineering
  • If the process is constantly being improved
    (continuous line), the innovation effort required
    to make a major change can be reduced
    (discontinuous line in the left).
  • Otherwise, the process of reengineering can
    become very expensive (discontinuous line in the
    right).

12
Improvement philosophies and methodologies
  • In order to find the source of a problem, it is
    important to define and understand the source and
    core of the problem.
  • Problem -gt Any deviation with respect to the
    standard value of a variable (quality and
    production rate).
  • It is necessary to know what the variable
    objective is (desired standard) and what is the
    starting situation in order to propose a
    realistic objective.

13
Improvement philosophies and methodologies
  • Three main factors that production managers fear.
  • Poor quality.
  • Increase of production cost.
  • Increase in the lead time.

14
Improvement philosophies and methodologies
  • Production improvements should be based on the
    improvements of processes as well as operations.
  • Problems can appear in any of the basic elements
    that constitute the production area.

15
Improvement philosophies and methodologies
  • Some example of problems.
  • Defects, obsolete work methods, energy waste,
    poorly coached workers, low rates of performance
    in machines and materials.
  • By analyzing the production management history,
    several improvement approaches can be identified.
  • Just-in-time Methodologies (Lean Manufacturing).
  • 20 Keys to Workplace Improvement (Kobayashi).

16
Improvement philosophies and methodologies
  • The keys to the Japanese success are.
  • Simple improvement methodologies.
  • Workers respect.
  • Teamwork.

17
Just-in-Time. Introduction
  • In accordance with this philosophy principle,
    nothing is manufactured until it is demanded,
    fulfilling the customer requirements
  • I need it today, not yesterday, not tomorrow.
  • The plant flexibility required to respond to this
    kind of demand is total, and is never fully
    obtained.
  • It is critical that inventory is minimized.
  • Product obsolescence can make in-process and
    finished goods inventory worthless.

18
Just-in-Time. Introduction
  • In 1949 Toyota was on the brink of bankruptcy.
  • While in the United States Fords car production
    was at least 8 times more efficient than
    Toyotas.
  • The president of Toyota, Kiichiro Toyoda,
    presented a challenge to the members of his
    executive team.
  • To achieve the same rate of production as the
    United States in three years.

19
Just-in-Time. Introduction
  • Taiichi Ohno, vice president of Toyota, accepted
    his challenge.
  • Inspired by the way that an American supermarket
    works, invented the Just-in-time method.
  • With the aid of Shigeo Shingo and Hiroyuki
    Hirano.

20
Just-in-Time. Introduction
Thinking revolution
  • Daiichi Ohno (???? ) and Shigeo Shingo (???? )
    wrote their goal.
  • Deliver the right material, in the exact
    quantity, with perfect quality, in the right
    place just before it is needed.
  • They developed different methodologies.

The 5S
Workforce optimization
Visual Control
Standard operations
Poka-Yoke
Jidoka
One-Piece flow
TPM
Multi- functional workers
Leveling Production
Kanban
SMED
JUST IN TIME
21
Just-in-Time. Introduction
  • The systematic application of all the
    methodologies create a new management philosophy.
  • The real value is the knowledge acquired during
    its implementation.
  • The philosophy developed in Toyota was not
    accepted until the end of the sixties.
  • Japan in 1973 benefited from the petroleum crisis
    and started to export fuel efficient cars to the
    United States.
  • Since the 1970s, Japan has been the pioneer of
    work improvement methodologies.

22
Just-in-Time. Thinking Revolution
  • The Western world employed the following formula
    to obtain the price of a product.
  • Price Cost Profit.
  • In Japan, mainly Toyota, employed the following
    expression.
  • Profit Price Cost.
  • Today, this formula is used worldwide.
  • In order to make sure that Toyota would work like
    the supermarket it was necessary to identify and
    eliminate all business and production wastes.

23
Just-in-Time. Thinking Revolution
  • The real cost is as big as a seed of a plum
    tree.
  • In some cases, manufacturers, let the seed (cost)
    grow as big as a tree.
  • Managers try to decrease the cost by cutting some
    leaves out.
  • In reality, it is more efficient to eliminate
    tasks that do not add value to the product.
  • Reducing the tree to a smaller size is equivalent
    to planting a smaller seed.
  • The goal of Toyotas executives was to find this
    plum tree seed and work hard to reduce the cost.

24
Just-in-Time. Seven types of Waste
  • Hiroyuki Hirano (????) defined waste as
    everything that is not absolutely essential.
  • Few operations are safe from elimination.
  • He also defined work as any task that adds value
    to the product.
  • In Toyotas factories outside of Japan, they
    required between 5 to 10 times more operations to
    produce the same car.
  • Shigeo Shingo identified 7 main wastes common to
    factories.

25
Just-in-Time. Seven types of Waste
  • Overproduction
  • Producing unnecessary products, when they are not
    needed and in a greater quantities than required.
  • Inventory.
  • Material stored as raw material, work-in-process
    and final products.
  • Transportation.
  • Material handling between internal sections.

26
Just-in-Time. Seven types of Waste
  • Defects.
  • Irregular products that interfere with
    productivity stopping the flow of high quality
    products.

27
Just-in-Time. Seven types of Waste
  • Processes.
  • Tasks accepted as necessary.
  • Operations.
  • Not all operations add value to the product.
  • Inactivities.
  • Correspond to machines idle time or operators
    idle time.
  • Inventory is considered the type of waste with
    greater impact

28
Just-in-Time. Inventory
  • Inventory is a sign of an ill factory because it
    hides the problems instead of resolving them.
  • For example, in order to cope with the problem of
    poor process quality, the size of production lots
    is typically increased.
  • Products that will probably never be used, get
    stored.

29
Just-in-Time. Inventory
  • If the problem that produces the low quality is
    solved inventory could be reduced without
    affecting service.
  • Sometimes it is necessary to force a decrease in
    inventory in order to identify the production
    variability that necessitated it.
  • Then, the work method can be changed.

30
Lean Manufacturing
  • Lean Manufacturing is the systematic elimination
    of waste.
  • Lean is focused at cutting fat from production
    activities.
  • Lean has also been successfully applied to
    administrative and engineering activities as
    well.

31
Lean Manufacturing
  • Many of the tools used in lean can be traced back
    to Taylor, Ford and the Gilbreths.
  • The Japanesse systematized the development and
    evolution of improvement tools.
  • Lean Manufacturing is one way to define Toyotas
    production system.
  • MUDA is the term chosen when referring to lean.
    In Japanese, MUDA means waste.

32
Lean Manufacturing
  • Lean Manufacturing is supported by three
    philosophies.
  • Just-in-time
  • Kaizen (continuous improvements)

33
Lean Manufacturing
??????????????(Automation)??,????????,????????????
?????????,????????????????????????????,???????????
??,??????????????!
  • Jidoka (???).
  • Translates as autonomation.
  • Machinery automatically inspects each item after
    producing it, ceasing production and notifying
    humans if a defect is detected.
  • Toyota expands the meaning of Jidoka to include
    the responsibility of all workers to function
    similarly.

34
Lean Manufacturing
  • Traditional approximations improves the lead time
    by reducing waste in the activities that add
    value (AV).
  • Lean Manufacturing reduces the lead time by
    eliminating operations that do not add value to
    the product (MUDA).

Lead Time
35
20 Keys to workplace improvement
  • Iwao Kobayashi, in 1988, published a book
    explaining 20 keys to Workplace improvement.
  • They all must be considered in order to achieve
    continuous improvement.

36
20 Keys to workplace improvement
  • These 20 keys are arranged in a circle.
  • Shows the relations between the keys and their
    influence on the three main factors.
  • Quality, cost and lead time.

37
(No Transcript)
38
Quality
39
Cost
40
Lead Time
41
20 Keys to workplace improvement
  • There are four keys outside the circle.
  • Keys 1, 2 and 3 must be implemented before the
    rest.
  • Key number 20 is the result of implementing the
    other 19 keys.

42
20 Keys to workplace improvement
  • Kobayashi divided each key into five levels and
    set some criteria to rise from one level to the
    next.
  • Kobayashi offers the steps to reach the final
    level gradually rather than attempting to
    directly reach the top.

43
20 Keys to workplace improvement
  • Kobayashi presents a radar graphic to show the
    evolution of the factory
  • The scoring of each key is represented.
  • Kobayashi recommends to improve all the keys
    equally.
  • In the radar graphic, the factorys scoring will
    grow concentrically.

44
Overall Equipment Efficiency
  • To improve the productivity of production
    equipment Nakajima summarized the main time
    losses for equipment based on the value of three
    activities.
  • Available work time -gt Calendar time.
  • Fixed time for planned stops -gt Preventive
    maintenance, operators break.
  • The rest of the time is considered load time.

45
Overall Equipment Efficiency
  • Six main causes that reduce valid operation time.
  • Breakdowns.
  • The time that the machine is stopped by repairs.
  • Setup and changeovers.
  • Corresponds to the change time between models, or
    between products of the same model.
  • Idling and minor stoppage.
  • Loss time caused by the processes randomness or
    by the worker-machine cycle complexity.

46
Overall Equipment Efficiency
  • Six main causes that reduce valid operation time.
  • Reduced speed.
  • Caused by the wear of components.
  • Defects and reworks.
  • Low quality products.
  • Starting losses.
  • Machine produces defects until it reaches the
    operation steady state.

47
Overall Equipment Efficiency
  • These six main losses are grouped.

48
Overall Equipment Efficiency
  • The previous grouped losses define three basic
    indicator.
  • Availability, performance and quality.
  • Overall Equipment Efficiency (OEE) A P Q

49
Overall Equipment Efficiency
  • Objectives predicted for each indicator by
    Nakajima.
  • More than 90 in the availability.
  • More than 95 in the rate of performance.
  • More than 99 in the rate of quality.
  • The main advantage of the implementation of these
    rates is that they can show how the improvements
    carried out affect directly the equipment
    efficiency.

50
Overall Equipment Efficiency
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