Harri Haapasalo Lean Production

8/14/2019 Harri Haapasalo Lean Production

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arri Haapasalo: Lean production 5.4.2006

niversity of Oulu, Waste minimizationnd resources use optimization course 1

Lean productionHarri Haapasalo; D.Sc. Tech., M.Sc. Econ.

Professor in Industrial Engineering and Management

Department of Industrial Engineering and Management

e-mail: [email protected], office TF320

Lean production is a philosophy the philosophy of avoiding waste in

the production system (Parks 2003)

Waste minimization and resources use optimization

Outline1.Defining Lean Production2.What leads us to Lean?3.How to Implement lean?4.Where to go after Lean Agility? Value Nets?

Lean production Is a multi-dimensional approach that incorporates a wide range of

management practises, including: just-in-time, quality systems, work teams, cellular manufacturing, supplier management, etc.,in an integrated system

The main force is that these systems can operate synergistically tocreate efficient and high quality system that manufactures finishedproducts at the pace of customer demand with little or no waste.(zbayrak, 2005)

The focus of lean approach is essentially the elimination of wasteor muda.

Shortly defined lean is doing more with less. (Agarwal et al. 2005)


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Five fundamental concepts to lean

thinking to promote lean production

value,

value stream,

flow,

pull production and

perfection

Another approach definingcornerstones for Lean manufacturing

Cellular Manufacturing

Pull Scheduling (Kanban)

Six Sigma/Total Quality Management

Rapid Setup

Team Development


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From functions to processes - flow

M

anagement

P

roduction

Sales

Functions rules

M

anagement

P

roduction

Sales

Core prcesses defined

But functions still rules

M

anagement

P

roduction

Sales

Core processses

Are dominating

Product creation

Order delivery process

Customer relationship MGMT

The idea is to emphasize

leanness in horizontal level

Prosess map by Rummler andBrache

Customer

Sales

Prodcution

Puchasing

Generate

order

Check

order

Receive

order

Submit

order

Receive

order

Start manu-

facturing

Purchase

parts

Pack

product

Receive

parts

Forward

product

Receive

product


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Leanness means developing a value streamto eliminate all waste (Christopher & Towill2001)

focus on waste waste can be: overproduction waiting inventory or work in process processing waste

transportation motion making defective produts underutilizing people

WASTE = MUDA

Targets for prodcutionmanagement

OHJATTAVUUS ALHAISETKUSTANNUKSET

TUOTANNON TAVOITTEET

TOIMITUSKYKYLAATU

TYMATERIAALI POMA

KYTT-OMAISUUS

VAIHTO-OMAISUUS

OHJATTAVUUS

LPISYAIKA JOUSTAVUUS

KAPASITEETIN VARASTOIHIN JAKET:IINSITOUTUVANPOMANPIENENTMINEN

TOIMITUS-

KYKY

OHJATTAVUUS ALHAISETKUSTANNUKSET


TOIMITUSKYKYLAATU

TYMATERIAALI POMA

KYTT-OMAISUUS

VAIHTO-OMAISUUS

OHJATTAVUUS



TOIMITUS-

KYKY

OHJATTAVUUS ALHAISET


TOIMITUSKYKYLAATU

TYMATERIAALI POMA

KYTT-OMAISUUS

VAIHTO-OMAISUUS

OHJATTAVUUS



TOIMITUS-

KYKY

Controllability LowCosts

Targets for production

Ability to deliverQuality

WorkMaterials Capital

High productivity

Fixedassets

Floatingasets

Conrollability

Lead time Flexibility

High utilizationOf capasity

DeceasingTied in capitalIn inventories andWork In Progress

Ability to

deliver


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Inconsistency of purposes

for production managementAbility to deliver

Lead time

Minimize floating assetsInventories, WIP

Maximize utilizationrate of capasity

OPTIMUM

Changing Face ofManufacturing

AgileLeanJust-in-CaseOverallPosture

Materials

Finance

People

Philosophy

Strategic leadership;

Process-oriented

Teams;

Company-oriented

Individuals;

Self-oriented

Value ChainSupply ChainAdversarialsuppliers

Integrated perfncemanagement

Activity basedLabour allocation

Mass customisation;

Customer value

Just-in-Time;

Customer Service

Mass production;Product oriented

2000+1990s1980s


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Manufacturing Issues

Falling sales where to find new customers?

Input costs increasing, sales income falling

No time to introduce new methods

No money to develop new products / processes

How to increase output without increasing costs?

Too small to compete OR

Too big to react quickly to changing market

Increasing complexity of legislation and regulation

What can I / we / anybody do aboutit?

Company Actions: Howcan we Compete?

Competitive Strategies:

80s

Quality

Delivery

Price

Flexibility

Image

90sPorter

Focus

&

Differen-tiation

2000+Treacy &Wiersema

Value

Proposition


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Lean Thinking roots are in

Toyota Philosophy Doing it all for the Customer

Levelled production

Pull system

Continuous-flow production

Takt time

Multi-skilling

TQM

TPM

Poka Yoke

SPC

Standardised work

Kaizen

workcentre

workcentre

K K

store

replacement batches

kanbanswithdraw & process

Item Qnty Day 1 Day 2 Day 5

Runner 100 20 20 20Repeater 27 7 7Stranger 5 5

Load 132 27 27 25Capty 135 27 27 27

Uncompeti ti ve Competi ti ve

Competito

r

Continu

ousim

provem

entSelf

Presentchange

Competitiveness

Time

time

Upper action limit

Upper warning limit

average

action?

Lean Manufacturing

Builds on roots but with specific focuson: Lead time reduction

Regular production

New products

Flexibility improvement

Variability reduction

Cost reduction


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Customer focus Lean production aims to optimize performance of the

production system against a standard of perfection tomeet unique customer requirements (Howell 1999)

Going Lean

the value needs to be created in the eyes of thefinal customer,

focus on value is therefore translated across

functional and company boundaries, the lean message suggests that the focus on

attention should not be on the company orfunctional department but instead on the completevalue stream (Hines et al. 2000)

to reach this point every company involved insupply chain has to go lean,

this is very demanding part, which needscollaboration and time.


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How to go leanObjective MethodUnderstand customers and

what value they want

Setting the direction,targets and checking

results1

Define the internal valuestream

An internal framework fordelivering value2

Eliminate waste, make info& products flow, pulled by

customer needs

Appropriate method tomake necessary change3

Extend the definition ofvalue outside your

company

Externalise the value focusto the whole value stream

4

Continually aim forperfection

Strive for perfection in theproduct and in all

processes and systems5

Levels of Lean thinking(Simons & Zokaei 2005)


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Lean Toolbox derived from

Toyota Philosophy

Value stream mapping1. Define value precisely from the end customer perspective.- specific product needs- specific capabilities- specific price, delivery and quality expectations2. Identify the entire value stream for each product line and eliminate waste.- Product definition and development- Material transformation- Information management3. Make the value added activities flow.- Through radical shifts in process methodology and organizational structure- Improving processes from end-to-end by eliminating scrap, downtime and WIP- Moving towards continuous operations vs. batch processing4. Provide what the customer wants only when the customer wants it.- Let the end customer pull products from the manufacturing value stream- Minimize finished goods inventories and WIP5. Pursue perfection through continuous improvementWhen lean principles are applied throughout the value stream, odd things begin to

happen;- People recognize there is no end to reducing effort, time, space and mistakes,- Your products become more closely aligned with the customer needs.


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Example of process map Note value-add time -vs- lead time

Prosess map by Rummler andBrache

Customer

Sales

Prodcution

Puchasing

Generate

order

Check

order

Receive

order

Submit

order

Receive

order

Start manu-

facturing

Purchase

parts

Pack

product

Receive

parts

Forward

product

Receive

product


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5S - the foundation for a

disciplined approach to workplace

5S is derived from five Japanese words starting withletter Sthat describe principles of goodhousekeeping: 1. Sort 2. Set in Order 3. Shine 4. Standardize 5. Sustain

It cleans and organizes areas around machinery and

equipment. It creates a safer work environment, removes clutter,

creates a labelling system for ease of recognition,introduces audit procedures, and creates a moreinviting work place. (Piatkowski 2004)

TPM is a systematic methodologyto eliminate equipmentbreakdowns and quality defects

productive maintenance involving total employeeparticipation and it must be carried out on acompanywide basis

system of preventive maintenance plans andprocedures for the equipments life span TPM focuses its methodology on elimination of six

major obstacles to equipment effectiveness:1. Equipment failure2. Setup and adjustment3. Idling and minor stoppages4. Reduced speed5. Production of scrap and defects6. Reduced yield from start-up to stable production


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Key to Lean Manufacture is

measurement Need clear, objective focus on value

Example: OEE (Overall Equipment Effectiveness) A composite measure of the ability of a process to carry out

value adding activity

OEE = % availability x % output achieved x % perfect output

If change to a process increases OEE it is worthwhileActual Available Production Time

Theoretical time minus planned downtime and shutdowns

This is the realistic best available production time (100%)

Planned Downtime

PM, Shutdowns,

Holidays

Machine Running Time

Actual production hours minus downtimes

This is possible production if 100% performance

Unplanned Losses

Breakdowns, HR,

Set-up time

Availability

Net Operating Time

Machine speed against theoretical speed

This is the possible output if 100% quality

Speed losses

Idling, minor

stopages

performance

Performance

Useful Production Time

Material in minus product out

This is the real output

Quality Losses,

adjustments, Set-up

wasteQuality

OEE

OPTIMUM

Error Proofing

a systematic approach for anticipating anddetecting potential defects and preventingthem from reaching either internal or

external customer Error proofing is also mentioned in literature

with closely related terms such as, failsaving, poka yoke, zero defects and designfor manufacture and assembly.

Error Proofing seeks to proactiveidentification and prevention of errors at thesource.


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Setup Time Reduction Setup is a set of activities needed to prepare for the

next part to be produced Setup time is the total amount of elapsed time from

completion of the last good part from the previoussetup to the first good part from the new setup

There are two elements to setup time reduction: equipment modifications such as technical improvements, elimination of waste in setup methodology

Both activities will contribute significantly tominimize setup time

Continuous Flow

It studies production pace, manpower requirements,equipment utilization, and manufacturingmethodologies

is defined as movement of material from value-added process to value-added process withouttransport time or storage in buffers

all the knowledge of lean methodologies, tools, andprocess are put to an ultimate test of generatingcost reductions and improvements to quality,efficiency, and performance


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Pull System Pull system includes vital elements such as,

kanban to promote JIT and visual controlling For unique items consumed in production

lines, uniform containers (kanban) can beused to standardize lot sizes to signal theneed to replenish materials and simplifytransport between the vendor and customer

Materials can be pulled into production linesas needed to support the requiredproduction rate of finished goods

Standardized Work

Standardized work is the optimum combination ofoperators, machines and materials to ensure that atask is completed the same way every time with

minimum waste. This may sound a trivial but it isnt. Standardized work seeks to establish and clarify thebest method of production at the present time.

Standards must be specific and scientific meaningthat they are based on facts and analysis, not oncustom, guessing or memory

Standards must be adhered to; they are useless if no one follows them. for a standard to be standard, it will be consistently

followed and respected.


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Elements of the standard

operations (Monden 1983)

Agile a step on from lean?

Roots of agile in America defence industry developing the abilityto react and reorganise to successful equipment bids

Lean and agile have common components

quality, reliability, improvement, etc But lean is process focused, agile is boundary focused

Ability to thrive in constant, unpredictable change Key attributes of agile

Customer value focus (solutions not products) Flexibility to adapt to fundamental market changes

Not simply changes in product mix

Competing from multiple fronts, possibly virtually Organisational knowledge, including ability to adapt IT systems to

support new processes

Sometimes Agility has been defined as a sum of Lean andFlexibility


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Types of flexibility Planning flexibility the system's ability at the

planning stage to take up a structure suited to therelevant range of tasks.

Commissioning flexibility (teettminen) thesystem's ability to be adapted or set up for the giventasks, so that the system's capability can be verifiedand it remains constant.

Insensitivity (epherkkyys) the ability to function inspite of variations in the assembly.

Versatility (muunnettavuus) the ability to changeover directly to other foreseen tasks.

Adaptability (mukaantuvaisuus) the ability to bechanged over to unforeseen tasks.

Flexibility of re-use the ability to be rebuilt forother tasks.

Flexibility vs agility

agilityis an ability to quickly respond tochanges in an uncertain and changing

environment, or even cause changes thatare favourable to the organisation whereas flexibilityis taken to mean the

ability of companies to respond to a varietyof customer or other requirements whichexist within defined constraints

flexibility is an important aspect in agility agility is more external and flexibility is

internal


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Different views on lean -vs-

agileTraditionalTraditional LeanLean AgileAgile

The journey

LeanLean AgileAgile

Make to stockLow variety

Mass, repetitiveCost minimiser

Make/Engineer to order,High variety, Service culture

Product Innovator?Customer intimate?

A spectrum of companies

ComplementaryStock

(to decouple)

LeanLean AgileAgileMaterial

supplierscustomer

Make to forecast Make to order

Upstream variation Downstream variation

LEAN vs. AGILE(Christopher 2000)


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Establishing Foundations for

Lean, Agile

Need the classic pre-requisites for anyprogramme Strategy

Commitment

Objectives

Communication

Empowerment

Establish framework

Activity plan, cost, time and execution

Measurement and evaluation system

Culture

change

Use of

champion

Developing towards anagile supply chain

Goldmans (1995) distinctive forces that drive towards agility:1) market fragmentation,2) production to order in arbitrary lot sizes,

3) information capacity to treat masses of customers asindividuals,4) shrinking product lifetimes,5) convergence of physical products and services,6) global production networks,7) simultaneous inter-company co-operation and competition,8) distributed infrastructures for mass customization,9) corporate reorganization and10) pressure to internalize prevailing social values.


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speed, flexibilityand quality

Theoretical framework for the

agile supply chain

Agilesupplychain

Processintegration

Marketsensitive

responsiveand flexible

demand driven

VirtualICT utilization

Networkbased

modular design andmodular manufacturing

processes

Value net,

value-adding partnership (VAP)

a group of independent companies working close to each otherto manage the flow of products and services through the wholevalue chain

digitally linked network of customer-supplier relationships that

creates value to all of its counterparts, Customer aligned. Collaborative and systemic. Agile and scalable. Fast flow. Digital.

Value creation VA, NVA, NNVA

1. Non-value adding (NVA);(Type two MUDA)

2. Necessary but non-value adding (NNVA);

(Type one MUDA)3. Value-adding (VA)


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6 principles of ICT system in SCM

Information must be readily and consistently available to all thatneed it. Information availability can reduce operating and planninguncertainty.

Information must be accurate. Increased information accuracydecreases uncertainty and reduces inventory requirements.

Information must be timely. The delay between when an activityoccurs and when it is visible in the information system reducesplanning effectiveness and increases inventory.

Information should be appropriately formatted. The rightinformation must be in the right structure and sequence.

Information systems must be exception-based in order to highlightproblems and opportunities.

Information systems should be flexible to be able to meet both

system users and customers needs.

Bowersox & Closs (1995)

Useful literature

James Womack & Daniel Jones, 1996, LeanThinking: Banish Waste and Create Wealth inyour Corporation(Simon & Schuster)

John Bicheno, 2000, The Lean Toolbox, 2ndedn (Picsie Books)

Peter Hines & David Taylor, 2000, GoingLean: a guide to implementation(LeanEnterprise Research Centre, Cardiff BusinessSchool)

Imai, M. 1997. Gemba Kaizen: acommonsense, low-cost approach tomanagement New York, McGraw-Hill

Documents

Harri Haapasalo Lean Production