Principles of Lean Manufacturing with Live Simulation

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Principles of Lean Manufacturing with Live
Simulation
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Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction to Lean
Manufacturing Implementing Lean Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
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MEP Lean Websites
http//www.mep.nist.gov For firms http//www.mepc
enters.nist.gov For MEP centers only
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Recommended Readings

• Lean Thinking, by Jim Womack
• Becoming Lean, by Jeffrey Liker
• The Machine That Changed the World, by Jim Womack
  and Daniel T. Jones
• The Goal, by Eli Goldratt
• World Class Manufacturing The Next Decade, by
  Richard Schonberger
• Others can be found on the Lean website

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Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction to Lean
Manufacturing Implementing Lean Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
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Orientation
Orientation
to Buzz Electronics Enterprises (BEE)
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Product Catalog
Buzz Electronics Enterprises
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Blue Avenger
Buzz Electronics Enterprises
The Blue Avenger
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Red Devil
Buzz Electronics Enterprises
The Red Devil
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The Bottom Line
BEE
The Blue Avenger
Sells for 20
Materials cost 5.00
The Red Devil
Sells for 30
Materials cost 7.50
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Production Process Orientation
BEE

• Sales Representative Processes Customer Order
• Production Scheduler Generates Factory Order
  from forecast
• Kitter(s) Organizes raw materials for Factory
  Orders
• Material Handler Moves product between ALL
  workstations

• Spring Assembler Inserts Springs
• Resistor Assembler Inserts Resistors
• LED Assembler Inserts LEDs
• Diode Assembler Inserts Diodes

Assembly

• Inspector Conducts functional tests
• Reworker Repairs failed boards
• Warehouse/Ship Clerk Matches boards to Customer
  Orders
• Instruction Crib Attendant Controls work
  instructions
• Production Supervisor Supervises production
• Industrial Engineer Monitors production process
• Trucker Ships products to the customer

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Production Facility Orientation
BEE
Sales Office
Production Control
Kitting Area
Shipping Dock
Finished Goods Whse.
Rework Area
WIP Storage
Diode Assembly
Inspection Area
LED Assembly
Resistor Assembly
Spring Assembly
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Circuit Board Orientation
BEE
Blue and Red Boards
A
B
C
D
E
1
2
3
4
5
EXAMPLE 1) Insert spring into C3
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Product Components Orientation
BEE
Springs
Resistors
Diodes
LEDs
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Product Routing
BEE
Blue
LED
Springs
Resistor
Diodes
x1
x5
x1
x2
Red
Springs
x3
x5
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Circuit Board Assembly
BEE
The Red Devil
test
A
B
C
D
E
1
2
3
4
5
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Production Batching
BEE
The Blue Avenger
6 per batch
4 per batch
The Red Devil
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BEE
Production Scheduling Process
Shipments to customers
Customer order forms
Customer orders (demand)
Factory order forms
Finished Goods Warehouse
Production forecast
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Customer Service Targets
BEE
Promised shipments to customers
Promised shipments to customers
4 minutes after order
5 minutes after order
All orders are filled first-in, first-out (FIFO)
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Company Policies
Buzz Electronics Enterprises

• All shifts are 20 minutes
• Keep busy at all times
• Yell if you need parts
• Handle all parts first-in, first-out (FIFO)
• Only the Material Handler can move parts
• Stay at your workstation
• The boss is always right!

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Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction To Lean
Manufacturing Implementing Lean -- Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean -- Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
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Round One Buzz Electronics
Buzz Electronics is a traditional manufacturing
company.
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Round One Debrief

• Discuss results
• Discuss the process
• Lessons learned
• Relationship to real world
• What if scenarios
• Continuous improvement

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Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction To Lean
Manufacturing Implementing Lean -- Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean -- Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
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Mass Production
Material
LEDs
Diodes
Springs
Shipping
Receiving
Warehouse
Warehouse
Storage
Repair
Kitting
Testing
Ship
Value-Added Time

Minutes
Time in Plant

Weeks
ORDER
CASH
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History of Manufacturing
People
Product
Work Environment
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Cycle Time
One of the most noteworthy accomplishments in
keeping the price of Ford products low is the
gradual shortening of the production cycle. The
longer an article is in the process of
manufacture and the more it is moved about, the
greater is its ultimate cost. Henry Ford,
1926
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Lean Is Market Driven
Every morning in Africa, a gazelle wakes up. It
knows it must run faster than the fastest lion or
it will be killed. Every morning a lion wakes
up. It knows it must outrun the slowest gazelle
or it will starve to death. It doesnt matter
whether you are a lion or a gazellewhen the sun
comes up, you had better be running.
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Defining Lean
Lean has been defined in many different ways.
A systematic approach to identifying and
eliminating waste (non-value-added activities)
through continuous improvement by flowing the
product at the pull of the customer in pursuit of
perfection. The MEP Lean Network
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Definition of Value Added

• Value Added
• Any activity that increases the market form or
  function of the product or service. (These are
  things the customer is willing to pay for.)
• Non-Value Added
• Any activity that does not add market form or
  function or is not necessary. (These activities
  should be eliminated, simplified, reduced, or
  integrated.)

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Lean Eliminating the Wastes
Non-Value Added
Value Added

• Overproduction
• Waiting
• Transportation
• Non-Value Added Processing
• Excess Inventory
• Defects
• Excess Motion
• Underutilized People

Typically 95 of all lead time is non-value added
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Brainstorm Wastes
What wastes were apparent in Buzz Electronics?
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Eight Wastes
Overproduction
motion
Inventory
Waiting
Transportation
defects
Underutilized People
Non-Value Added Processing
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Overproduction

• Making more than is required by the next process
• Making it earlier than is required by the next
  process
• Making it faster than is required by the next
  process
• Causes of overproduction
• Just-in-case logic
• Misuse of automation
• Long process setup
• Unlevel scheduling
• Unbalanced workload
• Over engineering
• Redundant inspections

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Inventory Waste

• Any supply in excess of a one-piece flow through
  your manufacturing process
• Causes of excess inventory
• Misconception that this protects the company from
  inefficiencies and unexpected problems
• Product complexity
• Unleveled scheduling
• Poor market forecast
• Unbalanced workload
• Misunderstood communications
• Reward system
• Unreliable shipments by suppliers

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Inventory Waste in the News
Update Cisco Systems got greedy. And now it's
paying the price. On
Tuesday, the network-equipment giant provided the
grisly details behind its astonishing 2.25
billion inventory write-off in the third quarter,
essentially admitting that it too was caught up
in the Internet hype that, at its peak, gave the
company the highest market capitalization in
Wall Street history.
Eighty percent of the charge came from raw
materials and 20 percent was from work in
process.

Work in process, which primarily consisted of
subassembly boards, checked in at 450 million.

Of the raw
materials, 300 million of the charge was related
to memory products, specifically DRAM, SRAM and
flash-memory chips.
Optical equipment, including lasers and
modulators, represented 450 million.


Electro-mechanical equipment accounted for
150 million.
Non-memory components, including digital signal
processors and other microprocessors, checked in
at 900 million.
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Defects

• Inspection and repair of material in inventory
• Causes of defects
• Weak process control
• Poor quality
• Unbalanced inventory level
• Deficient planned maintenance
• Inadequate education/training/work instructions
• Product design
• Customer needs not understood

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Processing Waste

• Effort that adds no value to the product or
  service from the customers viewpoint
• Causes of processing waste
• Product changes without process changes
• Just-in-case logic
• True customer requirements not clearly defined
• Over-processing to accommodate downtime
• Lack of communication
• Redundant approvals
• Extra copies/excessive information

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Waiting Waste

• Idle time created when waiting for?
• Causes of waiting waste
• Unbalanced work load
• Unplanned maintenance
• Long process setup times
• Misuses of automation
• Upstream quality problems
• Unlevel scheduling

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People Waste

• The waste of not using peoples mental, creative,
  and physical abilities
• Causes of people waste
• Old guard thinking, politics, the business
  culture
• Poor hiring practices
• Low or no investment in training
• Low pay, high turn-over strategy

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Motion Waste

• Any movement of people or machines that does not
  add value to the product or service
• Causes of motion waste
• Poor people/machine effectiveness
• Inconsistent work methods
• Unfavorable facility or cell layout
• Poor workplace organization and housekeeping
• Extra busy movements while waiting

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Waste of Transportation

• Transporting parts and materials around the plant
• Causes of transportation waste
• Poor plant layout
• Poor understanding of the process flow for
  production
• Large batch sizes, long lead times, and large
  storage areas

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Lean Building Blocks
Continuous Improvement
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Value Stream Map Buzz Electronics
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IT Etch Wet Strip Process Value Stream Map
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Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction To Lean
Manufacturing Implementing Lean -- Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean -- Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
47
Round Two Company Instruction
Learn how to implement new Lean techniques

• Standardized Work
• 5S System
• Visual Controls
• Plant Layout
• Point of Use Storage
• Batch Size Reduction

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Standardized Work

• Operations safely carried out with all tasks
  organized in the best known sequence and using
  the most effective combination of these
  resources
• People
• Materials
• Methods
• Machines

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Standardization of Processes

• Standardization is the practice of
• -Setting standards
• -Communicating standards
• -Following standards
• -Systematic improvement of standards
• Continually improving standards is the process
  for developing consistent and reliable production
  methods.

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Workplace Organization
A safe, clean, neat, arrangement of the
workplace provides a specific location for
everything, and eliminates anything not required.
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Clutter
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Disorganization
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Congested Workspaces
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Elements of a 5S Program

• SortPerform Sort Through and Sort Out, by
  placing a red tag on all unneeded items and
  moving them to a temporary holding area. Within
  a predetermined time the red tag items are
  disposed, sold, moved or given away. When in
  doubt, throw it out!
• Set in OrderIdentify the best location for
  remaining items, relocate out of place items, set
  inventory limits, and install temporary location
  indicators.
• ShineClean everything, inside and out. Continue
  to inspect items by cleaning them and to prevent
  dirt, grime, and contamination from occurring.
• StandardizeCreate the rules for maintaining and
  controlling the first 3 Ss and use visual
  controls.
• SustainEnsure adherence to the 5 S standards
  through communication, training, and
  self-discipline.

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Tool Organization
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Visual Controls

• Simple signals that provide an immediate
  understanding of a situation or condition. They
  are efficient, self-regulating, and
  worker-managed.
• Examples
• Kanban cards
• Color-coded dies, tools, pallets
• Lines on the floor to delineate storage areas,
  walkways, work areas, etc.
• Andon lights

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Real Time Production Reports
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Visual Inventory Replenishment
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Make Dirt Easy to See
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Make Manufacturing Visual
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Plant Layout
Ship
QC
Rec
Raw Stock
QC
Screw Machine
Shear
Stamp
Drill
Lathe
Assembly
Brake
Mill
Weld
Grind
Finish
Parts Stock
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IBM Plant Product Path, CU Backend
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Changeover Defined

• Changeover is the time
• between the last good piece
• of the current run
• to the first good piece
• on the next run.

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Quick Changeover

• Definition Changing over a process to produce a
  different product in the most efficient manner.
• STEPS IN A CHANGEOVER (taken from Shigeo Shingos
  Single Minute Exchange of Dies)

Percent of time of changeover
30
50
5
15
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Point of Use Storage (POUS)

• Raw material is stored at workstation where used
• Works best if vendor relationship permits
  frequent, on-time, small shipments
• Simplifies physical inventory tracking, storage,
  and handling

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Impact of Batch Size Reduction
Batch Queue Processing
Process
C
10 minutes
10 minutes
10 minutes
30 minutes for total order
Lead
Time
21 minutes for first piece
Continuous Flow Processing
Process
Process
Process
B
A
C
12 min. for total order
3 min. for first part
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Batch Size Reduction

• The best batch size is one piece flow, or make
  one and move one!

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Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction To Lean
Manufacturing Implementing Lean -- Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean -- Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
69
Round Two Buzz Electronics
Buzz Electronics begins its Lean transformation.

• Changes in the organization
• Standardized Work
• 5S System
• Visual Controls
• Plant Layout

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Round Two Debrief

• Discuss results
• Discuss the process
• Lessons learned
• Relationship to real world
• What if scenarios
• Continuous improvement

71
Lean Building Blocks
Quick Changeover
Standardized Work
Batch Reduction
POUS
5S System
Visual
Plant Layout
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Lean Building Blocks
Standardized Work
5S System
Visual
Plant Layout
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Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction To Lean
Manufacturing Implementing Lean -- Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean -- Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
74
Round Three Company Instruction
Learn to implement more new Lean techniques

• Teams
• Quick Changeover
• Batch Reduction
• (POUS) Point of Use Storage
• Quality at the Source

75
Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction To Lean
Manufacturing Implementing Lean -- Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean -- Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
76
Round Three Buzz Electronics
Buzz Electronics continues its Lean
transformation.

• More changes in the organization
• Teams
• Quick Changeover
• Batch Size Reduction
• Point of Use Storage
• Quality at the Source

77
Round Three Debrief

• Discuss results
• Discuss the process
• Lessons learned
• Relationship to real world
• What if scenarios
• Continuous improvement

78
Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction To Lean
Manufacturing Implementing Lean -- Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean -- Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Evaluation
79
Round Four Company Instruction
Learn to implement more new Lean techniques

• Teams
• Quality at the Source
• Pull/Kanban
• Cellular/Flow
• Total Productive Maintenance (TPM)

80
Lean Workforce Practices

• Teams
• With rotation of highly specified jobs
• Cross-trained and multi-skilled employees
• Who can work many operations within a cell and
  operations in different cells
• Continuous improvement philosophy
• Process quality, not inspection
• Use of participatory decision-making
• Quality Control Circles, team-based problem
  solving, suggestion systems, etc.

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Quality at the Source

• Source Inspection Operators must be certain
  that the product they are passing to the next
  workstation is of acceptable quality.
• Operators must be given the means to perform
  inspection at the source, before they pass it
  along.
• Samples or established standards are visible
  tools that can be used in the cell for such
  purposes.
• Process documentation defining quality inspection
  requirements for each workstation may need to be
  developed.

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Poka Yoke

• What is Poka-yoke?
• A method that uses sensor or other devices for
  catching errors that may pass by operators or
  assemblers.
• Poka-yoke effects two key elements of Zero
  Defects Quality
• Identifying the defect immediately ( Point of
  Origin Inspection)
• Quick Feedback for Corrective Action
• Poka-yoke detects an error, gives a warning, and
  can shuts down process.

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Push vs. Pull Systems

• Push System
• Resources are provided to the consumer based on
  forecasts or schedules.
• Pull System
• A method of controlling the flow of resources by
  replacing only what has been consumed.

84
Pull System

• Pull System is a flexible and simple method of
  controlling/balancing the flow of resources.
• Eliminates waste of handling, storage,
  expediting, obsolescence, repair, rework,
  facilities, equipment, excess inventory
  (work-in-process and finished)
• Pull System consists of
• Production based on actual consumption
• Small lots
• Low inventories
• Management by sight
• Better communication

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Pull System Flow Diagram
Information Flow
Raw Matl
Fin. Goods
Process C
Process A
Process B
Customer
Supplier
Parts Flow
Kanban Locations
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Cellular Manufacturing
Linking of manual and machine operations into the
most efficient combination to maximize
value-added content while minimizing waste.
Punch
De-burr
Cut to size
Form
Package
Sand
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Refining the Cell Five Step Process
Step 1 Group products Step 2 Measure demands
establish Takt time Step 3 Review work
sequence Step 4 Combine work in balance
process Step 5 Design cell layout
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Step 1 Group Products
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Step 2 Establish Takt Time
Takt Time Demand Rate
Work Time Available
Takt Time
Number of Units Sold
Cycle Time Takt Time
Minimum of People
GOAL Produce to Demand
90
Step 3 Review Work Sequence

• Observe sequence of tasks each worker performs
• Break operations into observable elements
• Identify value added versus non-value added (NVA)
  elements and minimize NVA
• Study machine capacity, cycle times and change
  over times

91
Step 4 Combine Work to Balance Process
Seconds
Seconds
Takt Time 10 seconds
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Step 5 Design and Construct Cell

• Design Goals
• Flexible layout, lot size 1, point of use
  storage, visual management
• Mixed models
• Simplify Flows
• Integrate process operations, materials flow one
  way
• Minimize Materials Handling
• Concentrate on value-added motions
• Establish material replenishment procedure
• Make Use of People 100 Percent
• Promote visibility and flexibility
• Operators stand for flexibility

93
Transition to Flexibility
Traditional
Assembly Line
Optimal
94
Total Productive Maintenance (TPM)

• Systematic approach to the elimination of
  equipment downtime as a waste factor
• Enlisting the intelligence and skills of the
  people who are MOST familiar with the factory
  machines the equipment operators
• Charting/analyzing equipment performance to
  identify root cause of problems, and implementing
  permanent corrective actions

95
Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction To Lean
Manufacturing Implementing Lean -- Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean -- Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
96
Round Four Buzz Electronics
Buzz Electronics continues its Lean
transformation.

• Changes in the organization
• Pull/Kanban
• Cellular/Flow
• Total Productive Maintenance (TPM)

97
Round Four Debrief

• Discuss results
• Discuss the process
• Lessons learned
• Relationship to real world
• What if scenario
• Continuous improvement

98
Lean Building Blocks
Cellular/Flow
Pull/Kanban
TPM
Quick Changeover
Quality at Source
POUS
Standardized Work
Batch Reduction
Teams
5S System
Visual
Plant Layout
99
Course Agenda
Welcome Introduction to Simulation Round One of
Simulation Introduction To Lean
Manufacturing Implementing Lean -- Standardized
Work, 5S System, Visual Controls, and Plant
Layout Round Two of Simulation Implementing Lean
Teams, Quick Changeover, Batch Reduction, POUS,
Quality _at_ Source Round Three of
Simulation Implementing Lean -- Pull/Kanban,
Cellular Flow, TPM Round Four of
Simulation Implementation Course Evaluation
100
Continuous Improvement (CI)
Old Adage If you always do what you always
did, youll always get what you always
got. Competitive Corollary If the other guy
gets BETTER, youre gonna get LESS.
101
Lean Building Blocks
Continuous Improvement
102
Barriers to Improvement
If we all know we need to improve, the question
becomes why dont we?
103
Keys to Success

• Prepare and motivate people
• Widespread orientation to CI, quality, training
  and recruiting workers with appropriate skills
• Create common understanding of need to change to
  Lean
• Employee involvement
• Push decision-making and system development down
  to the lowest levels
• Trained and truly empowered people
• Share information and manage expectations
• Identify and empower champions, particularly
  operations managers
• Remove roadblocks (i.e., people, layout, systems)
• Make system both directive yet empowering

104
Keys to Success (Continued)

• Atmosphere of experimentation
• Tolerating mistakes, patience, etc.
• Willingness to take risks (safety nets)
• Installing enlightened and realistic
  performance measures, evaluation, and reward
  systems
• Do away with rigid performance goals during
  implementation
• Measure results and not number activities/events
• Tie improvements (long-term) to key macro level
  performance targets (i.e., inventory turns,
  quality, delivery, overall cost reductions)
• The need to execute pilot projects prior to
  rolling culture out across organization is also
  essential (e.g., model lines, kaizen blitzes)
• After early wins in operations, extend across
  ENTIRE organization

105
Implementation Success Factors

• Unyielding leadership
• Strategic vision based on Lean enterprise as part
  of company strategy
• Observe outside successes and failures
• Ability to question EVERYTHING
• Deep commitment to EXCELLENCE

106
Benefits of Lean
Percentage of Benefits Achieved
0 25 50 75 100
Lead Time Reduction
Productivity Increase
WIP Reduction
Quality Improvement
Space Utilization
107
Typical Objections

• How should you deal with these objections to
  Lean?
• It takes too much discipline.
• It takes too long to implement.
• My process is too complex I have to deal with
  too many uncontrollable variables, like late
  supplier shipments, sick people, etc.
• My process requires a large batch size.
• It doesnt make sense in my industry.
• Its unclear to me how Lean will work with my
  MRP system.

108
Getting Started
Value Stream Mapping

• A simple, visual approach to
• Focusing on a product family
• Creating a clear picture of current material and
  information flow associated with that product
  family
• Identifying Lean tools and techniques that can
  improve flow and eliminate waste
• Incorporating those ideas in a new picture of how
  material and information should flow for that
  product group
• Creating an action plan that makes the new
  picture a reality for that product family

109
Lean Building Blocks
Continuous Improvement
110
Conclusion
Lean
Traditional

• Simple and Visual
• Demand Driven
• Inventory as Needed
• Reduce Non-Value Added
• Small Lot Size
• Minimal Lead Time
• Quality Built
• Value Stream Managers

• Complex
• Forecast Driven
• Excessive Inventory
• Speed Up Value Added Work
• Batch Production
• Long Lead Time
• Quality Inspected-in
• Functional Departments