LEAN MANUFACTURING

Lean manufacturing concepts
Lean manufacturing concepts were developed over the last five to six decades, primarily in Japan, particularly for the Toyota production system. These concepts met various tests for many many years and passed the test of time very easily.

Lean manufacturing revolutionaries the manufacturing process. It was not a fine tuning of the existing manufacturing processes. These manufacturing techniques are conceptually different from the traditional process. For an example, traditional manufacturing works based on inventory. But lean manufacturing questions the role of inventory

and defines as a waste it self and also as the reflector of the imperfections a system has. This example, itself shows the conceptual deference between the traditional manufacturing system and lean manufacturing system.

Sometimes it is very hard to believe that a system like lean manufacturing was born with a simple set of concepts. But it is true. Principle on which lean manufacturing operates is very simple. For an example it identifies the fact that “customer will not pay for the mistakes, but only for the value of the product or the service they receive”. The impact on this thinking is huge on the manufacturing process. It changed the way people looked at the manufacturing process. It made people to define value of the product from the customer’s point of view, not from the internal manufacturing point of view.

To successfully implement lean manufacturing, it is necessary to understand the differences between the lean manufacturing concepts to the conventional manufacturing. Failing to do this, will eventually kill your success.

ACTUALLY WHAT IS LEAN?
The core idea is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with less resources.
A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.
To accomplish this, lean thinking changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.
Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate.
Lean for Production and ServicesA popular misconception is that lean is suited only for manufacturing. Not true. Lean applies in every business and every process. It is not a tactic or a cost reduction program, but a way of thinking and acting for an entire organization.
Businesses in all industries and services, including healthcare and governments, are using lean principles as the way they think and do. Many organizations choose not to use the word lean, but to label what they do as their own system, such as the Toyota Production System or the Danaher Business System. Why? To drive home the point that lean is not a program or short term cost reduction program, but the way the company operates. The word transformation or lean transformation is often used to characterize a company moving from an old way of thinking to lean thinking. It requires a complete transformation on how a company conducts business. This takes a long-term perspective and perseverance.
The term "lean" was coined to describe Toyota's business during the late 1980s by a research team headed by Jim Womack, Ph.D., at MIT's International Motor Vehicle Program.
The characteristics of a lean organization and supply chain are described in Lean Thinking, by Womack and Dan Jones, founders of the Lean Enterprise Institute and the Lean Enterprise Academy (UK), respectively. While there are many very good books about lean techiniques, Lean Thinking remains one of the best resources for understanding "what is lean" because it describes the thought process, the overarching key principles that must guide your actions when applying lean techniques and tools.

LEAN THINKING.
Purpose, Process, PeopleWomack and Jones recommend that managers and executives embarked on lean transformations think about three fundamental business issues that should guide the transformation of the entire organization:
- 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: How can the organization insure that every important process has someone responsible for continually evaluating that value stream in terms of business purpose and lean process? How can everyone touching the value stream be actively engaged in operating it correctly and continually improving it?
"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."

How does 5S Implementation work?

The first time I was involved in a 5S training program was with a typical American plastic injection molding shop of about 10 mold makers. We had been in business as long as plastic molding was a business, so there was a lot of " stuff" laying around. It seemed that everything had a place, but only a few knew the secrets of where it all was.

I was highly skeptical of this idea at first because I had spun my wheels for so long on every new program that the managers learned at the latest seminar. Most of these programs just took our time and yielded little or nothing in the way of results.

When I heard that it was Japanese, I got interested. At the time, they were decimating our auto industry and I figured they must know something we didn't.

5S Implementation Is Truly Worth It

5S implementation is one of the smartest things you can do for your business, without a doubt. Your clutter will vanish, you will know where every single thing is in your shop, and everybody will be happier and more productive. What more could you ask for!

Seriously, if you have not made 5S implementation part of your daily operation, do it now. There is really no reason to delay, unless you are already highly organized and efficient. It could be that some exceptional manufacturing shop is just naturally that way, it does happen, but rarely.

What is lean manufacturing?

What is lean manufacturing all about? Very simply put, the lean manufacturing process is a comprehensive way to reduce waste of all types. It could be a waste of time or material, it is still waste.

Many studies have measured the amount of waste a typical manufacturer has, and it is usually shocking, as well as revealing.

It takes time and a lot of effort to change a shop culture. It is not enough to add slogans and banners, or even add one program after another. Lean manufacturing is like adding spokes to a wheel, so the wagon can roll.

Kaizen Rules

To ensure that the kaizen mindset is being followed and that every individual's creativity is being fully utilized, the following three rules are commonly prescribed:

1. Spend no money

2. Add no people

3. Add no space

In practice, results will be just the opposite; kaizen will reduce costs, space requirements and cycle time. Of course, since it is continuous, as soon as one set of problems are solved, new problems surface which must be overcome. By going through this process, the production system becomes stronger and stronger.

Kaizen Approach

A key element of the Toyota Production System (TPS) is kaizen. Although literally translated to simply mean ‘improvement’, in a lean context, the Japanese word has come to symbolize a somewhat bolder concept.

Kaizen is a team based approach towards implementing process changes in small increments. Its goal is to identify waste by forcing production problems to surface so that they become visible for everyone to see. Once identified, such problems are solved with worker consensus.

While this sounds simple and straightforward, from an execution point of view, it requires great effort from both workers and managers to become comfortable with this new work method. It requires workers to lead change efforts themselves with engineers and managers fulfilling a team member role. Also, action is taken immediately on the shop floor without hours of analysis.

Since changes are small in scope, individual mistakes can be easily corrected. However, since they are made in rapid succession, results are evident in days.

It can be said that kaizen is the bedrock of a successful lean transformation. By following a kaizen mindset, the production system gets stronger as trust at all levels grows.

What next steps should I take if I would like to move forward with Lean? What is Gembutsu's process?

Companies wishing to further understand the results that Gembutsu can achieve at their location should request an introductory conference call. The objective of this call is to answer any preliminary questions that your company may have regarding the implementation process. It also provides us with an opportunity to become more familiar with your company's history and culture. During the call, Gembutsu will present 1) the major elements of lean theory, 2) the typical implementation process and 3) key points of Gembutsu's differentiation. Key managers are invited to participate on the call as appropriate for your evaluation process.

Following the call, if both parties see a potential fit, the next step is to schedule an on-site visit during which Gembutsu completes a Lean assessment. This detailed evaluation, carried out over several days, will measure your company's current practices as well as allow Gembutsu to better understand the business' unique drivers and challenges. The deliverable from the assessment is a specific lean implementation proposal which is presented either in person or via conference call directly following the visit.

Where does Six Sigma fit in with Lean (and vice versa)?

In general, six sigma focuses on the value added elements of a process by reducing variation, and therefore defects, from the process. In contrast, the emphasis of lean is on eliminating waste from non-value added activities. The 7 wastes are overproduction, defects, unnecessary motion, inventory, space, transportation and waiting time.

Gembutsu's view is that lean and six sigma can work well together. Our approach is to "reduce lead-time through the elimination of waste" and we use any relevant tools that accomplish this objective.

What is a Lean Promotions Office (LPO)?

In order to systematically implement lean principles within company, it is very helpful for a single individual be tasked with leading the lean implementation program on a full-time basis. This experienced manager heads a so-called Lean Promotions Office and is tasked with responsibilities such as:


• Function as leader for the company's lean implementation
• Act as a liaison between Gembutsu and the client to ensure efficient knowledge-transfer.
• Participates in all Gembutsu-lead kaizen events
• The first person trained to manage kaizen events and is expected to lead their own kaizen events
• With management buy-in and support, set the implementation plan and ensure its execution.
• Is responsible for developing and executing a company-wide Lean training plan
• Is responsible for ensuring that kaizen events are lead by other in the company (production managers and supervisors, engineers, etc...)
• Acts as liaison between the shop floor and management. Ensures that Lean goals align with the company's strategic direction and objectives
• Measures savings from accomplished from each kaizen workshop and communicates these with accounting

If Lean will ultimately require less people, what happens to freed-up personnel?

In order to receive involvement from employees, it is crucial that they have no fear of job loss following a kaizen activity. In practice, this means that if a post-kaizen process requires less employees, the freed-up personnel should not be let go, but re-deployed elsewhere in the company.

Having said this, it is fully understood that to obtain credit for a cost reduction, the company must operate with a net headcount reduction. This is usually solved by not replacing employees during normal attrition (retirements, voluntary leaving, promotions, etc…) or by not renewing temporary / part-time worker contracts. In most all cases, this practice which is communicated up-front during the kick-off communication of lean implementation, is acceptable to both managers and shop floor personnel.

What change in duties or responsibility can managers expect as a result of a Lean transformation?

While empowering employees will certainly drive quality, cost and delivery improvement ideas, it will also task managers to remove organizational barriers in order to implement these ideas. The speed and agility with which these inquiries are answered will directly affect the success of the lean program.

Gembutsu works hand-in-hand with the company's management team to provide guidance and feedback regarding how to most effectively communicate direction and execute the necessary support.

What changes can employees expect as a result of a Lean transformation?

One of the goals of Lean is to move decision making closest to the customer, or in other words, as close as possible to the physical product or service, since this is what the customer receives. Since the individual operator is the closest human to the product, the goal becomes to move decision making to this level. Consequently, the first and immediate change that employees notice is that they have more significant input in the production methods of their work area. This empowerment often motivates team members to accomplish unexpected level of performance both for their own development as well as the company's productivity gains.

Naturally, employee empowerment is much more comprehensive than management simply stating that moving forward employees will be empowered. It involves setting guidelines and boundaries, rolling out the process in a deliberate and well communicated manner, and making adjustments when appropriate. Gembutsu works with upper management to ensure that this cultural shift towards lean does not jeopardize company morale or productivity.

What are the benefits of Lean and how long will it take to see results?

The kaizen team should expect to see measurable improvement and bottom line impact following each weekly kaizen event. Typical results of a kaizen event include:


Hard Savings (direct P&L impact)

• Inventory (working capital) reductions of +75%.
• Cycle time reductions of 50% - 90%.
• Delivery lead-time reductions of 75%.
• Productivity increases of 15% - 35% per year.
• Defect reductions of 50% per year, with zero defects performance possible.

Soft Savings (usually less immediate direct impact)

• Space savings up to 50%.
• On-time delivery improvements of 99+%.
• Improvement in employee survey results.

During the lean assessment phase of a potential engagement (see question 10), Gembutsu identifies specific savings targets to be accomplished during a company's lean transformation. In most cases, these are annual targets. Each kaizen workshop must bring the company closer to this goal.

Gembutsu guarantees delivery of the financial results agreed upon during this assessment. These are regularly monitored throughout the engagement.

What exactly is 'Kaizen' and what is a “kaizen workshop”?

Kaizen is a Japanese word which roughly translates to continuous improvement. In the context of Lean manufacturing, kaizen is understood to signify small, incremental, yet frequent improvements to a process. Lean philosophy states that instead of making large changes that may require significant amounts of investment and risk, the kaizen mindset aims to make process improvements without 1) adding people to the process, 2) adding space to the process, and 3) without spending any money to implement the change (this last one is usually the hardest for companies follow).

Gembutsu's approach towards teaching the adoption of the kaizen mindset is by completing so-called kaizen workshops. These are 3-5-day focused efforts by a cross-functional team that focus on implementing changes within a production area. Tasked with a specific objective and scope agreed upon by upper management, the kaizen team must meet all of its objectives by the end of the workshop. The Gembutsu representative's role is to act as teacher to not only achieve savings by the end of the week, but also to ensure that sufficient knowledge-transfer is taking place.

The figure below shows how small incremental improvements can have a large positive impact over time. The pie chart represents a typical process having value-added and non-value added elements. The kaizen activity aims at reducing this non-value added portion of a process. We see that after each kaizen workshop the process is more and more efficient (has less and less non-value added activities).

What is the difference between the Toyota Production System and Lean Manufacturing?

This question comes up quite often. For all practical purposes, the two terms mean the same thing. The term “Lean Manufacturing” was coined by James Womac and Daniel Jones in their 1990 book The Machine That Changed The World to describe the phenomenal success that Japanese manufacturers were having in global markets. Since the Toyota Motor Company was the most successful of these Japanese companies to explain the Japanese manufacturing philosophy with their supply base and strategic partners, the term "Toyota Production System, or TPS, was born. Regardless of what it is called, the goal is always to eliminate waste from processes in order to reduce total lead-time.

My company is not a mass producer making a high volume of end products. Is Lean still applicable to us?

All business processes have value added and non-value added components. This holds true whether the process is located at a mass-producing manufacturer, within a job shop, or at a service oriented company such as a health care institution. The lean practitioner’s challenge is to appropriately apply the tools and philosophies of the Toyota Production System (TPS) in order to identify and eliminate these non-values added activities so that overall lead-time is reduced.

Gembutsu has worked with a wide range of companies from fortune 50 global corporations to small job shops. In each case, our goal is to learn the fundamentals and key performance indicators of the current business in order to determine the implementation approach that will result in the most significant improvement to the bottom line.

What is the Goal of Lean Manufacturing?

The goal of Lean manufacturing is the reduction of lead-time from order to cash through the elimination of waste from all business processes.

Successful workplace improvements

Successful workplace improvements are best measured by results and the cycle time taken to achieve breakthrough performance.

Examples of some recent Kaizen workshop improvements include:

· Parts Travel Distance
25 - 92%

· Finished Goods Inventory
13 - 67%

· Space Reduction
25 - 78%

· Work-In-Progress Inventory
60 - 92%

· People Travel Distance
33 - 78%

· Productivity Gains
15-45%

· Product Cycle Time
5-35%