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Lean Manufacturing


... about Value Streams the process to make a product from start to finish. ... Learning to Lead at Toyota by Steven J. Spear. Harvard Business Review ... – PowerPoint PPT presentation

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Title: Lean Manufacturing

Lean Manufacturing
  • Portland State University
  • School of Business Administration
  • ISQA 552 Managing Operations and the Value
  • Wednesday, March 8, 2006

Discussion Topics
  • Why the Need for Lean
  • Key Lean Concepts
  • Long-term View (Lean Enterprise)
  • Lean Application
  • Learnings, Issues and Challenges
  • Suggested Resources

Why The Need For Lean in the Footwear Industry
  • Historically, the footwear industry has operated
    as a push system focused on economies of scale,
    with large batches and long assembly lines.
  • Labor-intensive manufacturing processes require
    manufacturing in low-cost countries.
  • Focus on departmental efficiencies.
  • Customers increasing demands for a greater
    variety, more frequent deliveries, and smaller
    order quantities all at a lower cost.
  • Ongoing need to demonstrate leadership in
    corporate responsibility
  • Respect for workers
  • Safety and ergonomics
  • Sustainability (elimination of waste)
  • Industry and shareholder pressure to improve
    margins and reduce cycle time.

So what to do? Benchmark the best.
The Approach to Lean
  • Start with a simple definition of Lean Thinking
  • Deliver the most value
  • From your customers perspective
  • While consuming the fewest resources
  • Key Insights
  • Focus on each product and its value stream rather
    than organizations, functions, assets, and
  • Ask which activities are waste and which create
  • Enhance the value and eliminate the waste to
    optimize the whole.

Ohno Manufacturing Model
  • As per customer demand
  • In spec.
  • Lowest total cost
  • Zero injury
  • (With Profit)
  • Manpower
  • Machines
  • Materials
  • Quantity
  • Quality
  • Cost
  • Safety

All we are doing is looking at the time line
from the moment the customer gives us an order to
the point when we collect the cash. And we are
reducing that time line by removing the
non-value-added wastes. Taiichi Ohno,1988
Value Stream Concept
Screen Resumes Schedule Interviews
Create Job Posting Advertise
Conduct Interviews
Make Offer Negotiate Package
Product or Service Complete
Intent or Need
Value Stream All process steps, both VA NVA,
required to deliver a product or service to the
customer from the point that the intent or need
is identified.
Key Lean Concepts (to apply to Value Streams)
A house is a structural system that is strong
only if the roof, pillars, and foundation are
strong. A weak link weakens the whole system.
Toyota Production System TPS
Best Quality
Lowest Cost
Best Safety
High Morale
Shortest Lead Time
(Right product,
Right Time)



Error proofing
  • Safety
  • Teamwork
  • Flexible Workforce



Pull System

5 Whys

Operational Stability

Leveled Production

Standardized Work

5S and Visual Management

Total Productive Maintenance
Key Lean Concepts (continued)
Brilliant process management is our strategy. We
get brilliant results from average people
managing brilliant processes. We observe that our
competitors often get average results from
brilliant people managing broken processes. Mr.
Cho, President Toyota
  • Highly Motivated People
  • Safety concern for the worker has to be
    foremost to make the factory an environment where
    workers can contribute ideas.
  • Teamwork a team environment in the plant
    enables the team to manage itself, including
    solving most problems on their own. Management
    needs to see itself as there to support the
  • Flexible Workforce workers need to be
    multi-skilled to be redeployed when improvement
  • Questions to consider
  • How do your incentive systems need to change?
  • What are effective ways to involve all employees
    in the business of improvement?

Its the people who bring the system to life
working, communicating, and resolving issues
together. TPS encourages, supports, and in fact
demands employee involvement.
Key Lean Concepts (continued)
Losers have tons of variety. Champions take
pride in just learning to hit the same old boring
winners." -Vic Braden
  • Operational Stability
  • Level production (heijunka) an advanced topic,
    but the simple explanation is to do a little bit
    of everything, every day, throughout the day.
    Make all varieties all models and all sizes
    so that we are very very good at changing sizes
    and models.
  • Standard Work we need to identify and document
    the Best Way to safely make a quality part, every
    time within Takt Time. Then use that standard
    method by every operator, every time.
  • 5S and Visual Management A stable factory is
    well organized, clean, and disciplined. It is
    clear and obvious what is supposed to happen, and
    what is happening.
  • Total Productive Maintenance (TPM) is basically
    about maintenance of machines and moving away
    from being reactionary, to become preventative.

The idea is to move away from just in case
behavior, and create a boring factory, where the
same thing happens every day no surprises, no
accidents, no crisis.
Key Lean Concepts (continued)
  • Built-in Quality (Jidoka)
  • Andon Systems basically a way for the operator
    to call for help. If something is preventing
    them from making a quality part, they should
    activate the andon which lights up a board
    showing which operator needs help. The team lead
    is then alerted to come and provide support. The
    key idea is to empower the operator to stop the
    line and call for help.
  • Error Proofing -- putting in processes that
    eliminates the possibility of mistakes a good
    example of error proofing is on computers the
    jacks for plugging in various cables are all
    different sizes and shapes and they make them
    so that it is impossible to plug in to the wrong
    place, or to put in upside down.
  • 5 Why getting to root cause analysis when a
    problem arises, not just addressing symptoms.

The focus is quality at the source. The earlier
an issue is found, the less expensive it is to
fix. If you have to throw something away,
better to do so before you add a bunch of stuff
(value) to it.
Key Lean Concepts (continued)
  • Just-in-Time (Right product, right amount, right
  • Takt Time the speed at which material needs to
    move through that value stream. The concept
    represents a shift from departmental silos in the
    plant, to thinking about Value Streams the
    process to make a product from start to finish.
  • Continuous Flow inventory and information move
    through the value stream at takt time.
    Continuous flow makes problems visible because
    when a problem arises.
  • Pull System the customer ultimately creates a
    pull. So when the customer wants a finished
    pair, we make one. But customer is also thought
    of as the next process. So when final
    assembly needs a part, the upstream process
    produces one.
  • Quick Changeover -- If you want flexibility, we
    have to come up with ways to reduce the
    changeover time, so that its possible to change
    the line quickly and easily.

JIT, one of the pillars of TPS, is a set of
principles, tools, and techniques that allows
production and delivery of products in small
quantities with short lead times.
Long-term View (Lean Enterprise)
  • Most every company implementing lean has the long
    term goal of establishing a lean enterprise.
  • Diminishing returns from shop floor benefits.
    Can you save your way to prosperity?
  • Manufacturing represents less than one third of
    the total cycle time for a product.
  • Harvesting the benefits on the shop floor
    requires new ways of thinking about logistics,
    production planning, order management,
    purchasing, etc.
  • What is a lean enterprise?
  • Lean thinking applied throughout the entire
    organization (not just manufacturing)
  • Continuous improvement as a way of doing business
  • Performance measurements drive improvement
  • Everyone involved in kaizen activities
  • Extended lean efforts with suppliers, customers,
    and partners

Toyota began its innovative journey in 1945. so
clearly there is no finish line.
Long-term View (Lean Enterprise)
The Business Case for Lean Enterprise
  • Although only a relatively small amount of costs
    have actually been expended by the time a product
    has been designed, a relatively large amount of
    costs (about 80 percent) have been committed.
  • Thus, the greatest potential for cost management
    occurs during the planning and design.

June 2002
Lean Problem Solving Application
  • Portland State University
  • School Of Business Administration
  • Wednesday, March 8, 2006

Standardized problem solving
Not knowing the difference between opinion and
fact makes it difficult to make good decisions
Marilyn Vos Savant
  • 5 Whys to determine root cause
  • ?
  • ?
  • ?
  • ?
  • ?
  • Problems are opportunities to learn
  • Hiding problems undermines the system

Planning and Measurement
Plan Identify the problem Analyze for root
cause Formulate countermeasures Do Develop
implementation plan Communicate plan Execute
plan Check Monitor progress of plan Modify plan
if necessary Monitor results Act Evaluate
results Standardize effective countermeasures St
art PDCA again
A3 Proposal/Report Format
An A3 lays out an entire plan, large or small, on
one sheet of paper. It should be visual and
extremely concise. It should tell a story, laid
out from upper left-hand side to lower right,
which anyone can understand.
Implementation Plan
Applying PDCA and One Page Report Writing
  • Exercise instructions
  • Break into teams
  • Each team pick a topic from work or from school
  • For each topic, work through as much of the A-3
    format as you can. Defining the business problem
    is a good place to start.
  • Use visuals if possible. Use 5 why analysis to
    understand root cause. Note where you are making
    assumptions vs using facts.
  • Brainstorm recommendations that address root
  • Summarize your ideas in the A-3 format.

Title ________________
What is your proposed countermeasure(s)?

Current Situation
Where do we stand? Where we need to be?

What activities will be required for
implementation and who will be responsible for
what and when?

What is the specific change you want to
accomplish now?

What is the root cause(s) of the problem? What
requirements, constraints and alternatives need
to be considered?
Follow - up
How we will know if the actions have the impact
needed? What remaining issues can be anticipated?

Learnings, Issues and Challenges
  • Physical changes are relatively easy behavioral
    changes are difficult cultural changes can take
  • Implementations must have the right expectations
    and right incentives.
  • Although trade-offs still exist between cost,
    time and quality, TPS is a comprehensive approach
    to achieving improvements in all three.
  • Lean is a very people-centered initiative which
    makes it difficult to predict results.
  • Applying lean concepts in administrative areas is
    even more difficult.
  • Lean must be viewed as a long-term investment by
    the organization.

Some people imagine that Toyota has put on a new
set of clothes, so they go out and purchase the
same outfit and try it on. They quickly discover
that they are much too fat to wear it. Shigeo
Shingo (1989)
Five Suggestions for You Today
  • Learn the System, including the dirty details.
  • Choose a place to begin your own project.
    Implement it as an integrated system.
  • Use the Plan Vs. Actual to lead implementations
    of your Future States.
  • Learn Standardized Work (SWS). Implement it by
    focusing on the operator. Eliminate waste in
    each operators job!
  • Ensure clear ownership at the right level(s).

Closing Thoughts
  • From the end customers standpoint none of the
    information processing steps creates any value.
    To test this assertion, just ask yourself whether
    you would be less satisfied with a product if it
    could be ordered and delivered to you with no
    management of production and logistics
  • Obviously you would not be less satisfied.
    Indeed you would be more satisfied if the cost
    savings from eliminating information acquisition
    and management could be passed along to you.
  • Yet in the modern era of automated information
    management, most managers have implicitly
    accepted the notion that information is good,
    more information is better, and all possible
    information is best. In fact, information for
    control of operations is necessary waste.
    Managers ought to be minimizing the need for it
    rather than maximizing its availability.
  • Dan Jones and James Womack

Suggested Readings
Other Suggestions Tour a lean facility. See
www.lean.org, www.ame.org, www.crms.uky.edu/lean.
Lean Thinking Banish Waste and Create Wealth in
Your Corporation by James P. Womack, Daniel T.
Jones 1996.
Learning to See Version 1.3 by Mike Rother, 1999.
The Machine That Changed the World The Story of
Lean Production by James P. Womack 1991.
The Toyota Way 14 Management Principles From The
World's Greatest Manufacturer by Jeffrey Liker
The Gold Mine A Novel of Lean Turnaround by
Freddy Balle, Michael Balle. 2005.
Toyota Production System Beyond Large-Scale
Production by Taiichi Ohno. 1988
Learning to Lead at Toyota by Steven J. Spear.
Harvard Business Review Article, May 2004.
Decoding the DNA of the Toyota Production System
by Steven J. Spear, H. Kent Bowen. September 1,
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