Optimizing TPM from the Optimizing TPM from the

Shop Floor to the Boardroom Shop Floor to the Boardroom

-- TPM Trends TPM Trends --

Kinjiro akanoKinjiro akanoExecutive Vice PresidentExecutive Vice President

JIPM Solutions Co., Ltd.JIPM Solutions Co., Ltd.

Nov. 29, 2007

Chicago

JIPMSJIPMSJIPMS

Lean Manufacturing

and TPM

What is Lean Manufacturing ?

1980s Severe Competition with Japanese automobile

companies

1985 Start Research and study: IMVP (International

Motor Vehicle Program) by MIT

1990 The Machine that Changed the World report

1991 Focus Study: Toyota Production System (TPS)

TPS defines Seven Muda (wastes) and works to reduce

them thoroughly.

Muda was analogous to the fat of a company and

Toyota tried to establish a production system that would

trim the fat. That literally meant lean.

Lean Manufacturing is the leaner and meaner production

system accomplished by eliminating Muda

K. Nakano, JIPM Solutions

Background of Lean

MPlant

To obtain lean conditions, how you trim the fat is

critical.

In other words, the practical activity and approach for lean

is essential.

TPM is the effective theory for establishing a lean

manufacturing system, as it has step-by-step programs to

eliminate and prevent losses.

TPM is the Japanese management methodology that puts

high value on practicing waste elimination and kaizen

activity, which originated in Japanese automobile industry.

K. Nakano, JIPM Solutions

Mass Production Lean Production

OverviewOverviewOverviewOverview Minimize production costs by mass production

Improve efficiency and reduce costs

by elimination of waste

Product VarietyProduct VarietyProduct VarietyProduct VarietyLess variety More variety

Production VolumeProduction VolumeProduction VolumeProduction Volume Determine production volume according to production capacity

Produce the quantity customer

ordered

Production LineProduction LineProduction LineProduction Line Flow in Large numbers Flow in needed numbers

Product Defects HandlingProduct Defects HandlingProduct Defects HandlingProduct Defects Handling Hard to stop the line Stop the line and identify the root causes of the issues

Relation with SuppliersRelation with SuppliersRelation with SuppliersRelation with SuppliersShort-term and remotely related Long-term and closely related

WorkerWorkerWorkerWorkers Positions Positions Positions Position Variable cost type Fixed cost typeWorkWorkWorkWork Simple work most people can do Works needed skill trainingEducation of WorkerEducation of WorkerEducation of WorkerEducation of Worker Few skill training Planned & systematic training

Differences Between Mass Production and Lean Production

K. Nakano, JIPM Solutions

Mass Production Versus Lean Production

Basic Principles and common keywords in TPS and TPM

Basic Prin

ciples

Production technology

contribution

Thoroughly

Eliminate Wastes

Prevention Practice

Hands-on, shop-floor

approach

Participative

Management and

Respect for Labor

Profitable IE

Profitable TPM

Waste of Overproduction Waste of WaitingWaste in ConveyanceWaste in ProcessingWaste of InventoryWaste of MotionWaste of Defects

Breakdown LossChangeover & Adjustment LossCutting-tool Replacement LossStartup Loss Minor stops & Idling LossSpeed Loss Quality Defect & Rework Loss

Poka-yokePrevention rather than cure

Preventive MaintenanceCorrective MaintenanceMaintenance Prevention

KanbanVisual Mgt.Andon

Multi-Process HandlingParticipation in production system establishment.

Rewarding job

Pursuit of optimal conditionsVisual controlF-TagTPM Activity BoardAutonomous MaintenanceZero Losses Involve everyone

Change equipment, people

K. Nakano, JIPM Solutions

TPS & TPM

EssenceEssence of TPMof TPM

Developing People Leads to Good ManufacturingDeveloping People Leads to Good Manufacturing

History of TPM

1954 Preventive Maintenance Research in JMA1961 Maintenance Management Group1969 JIPE (Japan Institute of Plant Engineering)1971 TPM1972 JIPM(Japan Institute of Plant Maintenance)2005 JIPM-S (TPM Consulting Firm Outside Japan)

TPM & JIPM / JIPM-S

TPM Level 3

Develop the a

bility to satis

fy

the requirem

ents for perp

etual

corporate p

rosperity

Ground-Breaking TPM

Creative TPM

TPM Level 2

Establish the

ability to

respond effec

tively in the n

ew

arena of busin

ess competiti

on

Day-to-day

manageme

nt (self-man

agement)

TPM Level 1

Build a stro

ng factory

environmen

t

2-1 TPM of the 21st Century (Level 1,2,3)

A Conceptual View of the TPM Levels

TotalOverseas

JIPMSJIPMSJIPMS

Trend of TPM Awards (1)Trend of TPM Awards (1)

0

20

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WC

AdvancedSpecialSpecial

Cons' TPM 1st

Cons' TPM 2nd

1st category

2nd category

JIPM,2002

2222 1111 5555 666614141414 9999

22222222

4141414154545454

79797979 83838383 8383838396969696

114114114114

91919191105105105105

3333 2222 6666 3333 2222 7777 5555 2222 2222 111110101010 8888 12121212 8888 14141414

16161616 16161616 22222222

51515151

2929292939393939 42424242

7171717179797979

95959595

121121121121

100100100100

130130130130110110110110

118118118118

106106106106 9494949480808080

8181818154545454

46464646

50505050

3333 2222 6666 3333 22227777 5555 2222 2222 1111

10101010 8888 12121212 888814141414 16161616 16161616

22222222

51515151

29292929

41414141 42424242

72727272

84848484

101101101101

135135135135

109109109109

152152152152151151151151

172172172172

185185185185177177177177

163163163163

177177177177168168168168

137137137137

155155155155

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Domestic/

Overseas/

Total

Trend of TPM Awards (2)

JIPMSJIPMSJIPMS

TPM AwardTPM Award--Winning factories in IndiaWinning factories in India

JIPMS,2007

9595 9696 9797 9898 9999 0000 0101 0202 0303 0404 0505 0606

11

11 33 11 77 1414 22

11 11 11 33 66 55 1717 1919 1616 1212

Total factories 110

WorldWorld

ClassClass

AdvancedAdvanced

SpecialSpecial

SpecialSpecial

ConsistencyConsistency

TPMTPM

ExcellenceExcellence

2. Worldwide TPM

ME

4

EU

272 USA 69

MA

4

SA 58

Af

16

Os5

Asia

272

Asia 272

ME 4

EU 272

USA 69

MA 4

SA 58

Af 16

Os 5

Asia 272

ME 4

EU 272

USA 69

MA 4

SA 58

Af 16

Os 5

JP

1585

2006

Number of TPM Awardees by Location

Asia 11

EU 15151515SA 2222

Asia 11

EU 15151515SA 2222

1996

X25

SEIICHI NAKAJIMAWhy does TPM give Significant Results?

TPM is being deployed globally, reaching beyond differences in race, manners, custom, culture, etc.

All companies introducing TPM have achieved good results.

Products are made by people Manufacture well-selling products Innovative manufacturing facilities, technology, and systems are achieved by autonomous individuals with good morale and skills.

It is certain that this is based on the principle common to human beings, in other words, on behavioral science,research on why people work

Charging self-implementation requirement/Total-worker-participation type management (=TPM)

Automobile

Components

Semi-

conductors

Chemicals

Plastic

Products

0 10 20 30 40 50 60 70 80 90 100 110 120 130 140

Average Cost-Benefit of TPM by Industry

Units 100M

Amount saved through TPM

Amount invested in TPM

Cost Benefit of TPM

Human behavior factors A H Maslows 5-

stage hierarchy of human needs

Work is a type of psychological therapy

for satisfying our desire for self-

actualization.

People and work are in a cyclic

relationship; people grow and develop

through their work, bringing prosperity

to their companies, and that prosperity

leads to further individual development.

When people find a purpose in life

through their work, they become ever

more passionate about it.

The Theoretical Background to Team Activities (QC

Circles, ZD Groups, Jishu Kanri, etc.)

BehavioralBehavioral Science Science The Theoretical Background of TPMThe Theoretical Background of TPM

SELFSELF--ACTUALIZING MANAGEMENTACTUALIZING MANAGEMENT

Safety needs (job and income security)

Self-fulfillment needs(using ones talent)

Social needs (a sense of belonging)

Ego or esteem needs(self-respect)

Physiological needs (sleep, food, etc.)(Based on AH Maslows writings on self-actualizing

management)

TPM

SEIICHI NAKAJIMA

(ew Patterns of Management by Rensis Likert, 1964)

Linking Pin Function

New Management Pattern New Management Pattern Linking Pin FunctionLinking Pin Function

Factory General MangerFactory General MangerFactory General MangerFactory General Manger

Department MangerDepartment MangerDepartment MangerDepartment Manger

Area MangerArea MangerArea MangerArea Manger

Line MangerLine MangerLine MangerLine Manger

Team LeadersTeam LeadersTeam LeadersTeam Leaders

General EmployeesGeneral EmployeesGeneral EmployeesGeneral Employees

Factory TPM Steering Factory TPM Steering Factory TPM Steering Factory TPM Steering CommitteeCommitteeCommitteeCommittee

Department TPM Department TPM Department TPM Department TPM MeetingsMeetingsMeetingsMeetings

Area TPM Area TPM Area TPM Area TPM MeetingsMeetingsMeetingsMeetings

ShopShopShopShop----Floor Teams Floor Teams Floor Teams Floor Teams (PM Circles)(PM Circles)(PM Circles)(PM Circles)

Behavioral Science

(Preventive Maintenance)(Productive Maintenance)Prevention

Zero Breakdown ProductivityCost Down

Zero Defect

Do it right the first timeQC Circle etc.

Eupsychian Managementby A.H. Maslow

The Human Side of Enterpriseby Douglas McGregor

New Patterns of Management by Rensis Likert

etc

Small Group Activity

The Origin of TPMThe Origin of TPM

The Aim of TPMImprove the company by improving its people and its equipment

+

Improve The Company

---- Develop people with the skills required for

todays highly-automated factories----

1. Operators: Do Jishu-Hozen (AM)

2. Maintenance staff: Do advanced, specialised maintenance

3. Production engineers: Plan maintenance-free equipment

Improving the

People

1) Raise OEE by improving the equipment currently in use

2) Design new equipment for minimum life-cycle cost and

vertical startup

Improving the

Equipment

SEIICHI NAKAJIMA

Definition & Basic Concepts of TPMBasic Concepts of TPMBasic Concepts of TPM

2.2.Preventive philosophy Preventive philosophy (preventive action)(preventive action) MPMP--PMPM--CMCM

3.3.Participation of all Participation of all members members (Management (Management participation/Respecting participation/Respecting people)people) Overlapping small Overlapping small

group, group, JishuJishu Hozen by Hozen by operatorsoperators

4.4.Principle of actual scene Principle of actual scene and actual thingand actual thing What should beWhat should be for for

facilities and work, facilities and work, visual management, visual management, clean workplacesclean workplaces

5.5.Renewing common senseRenewing common sense Continued evolution Continued evolution

and growth of views and growth of views and thinkingand thinking

1.1.Create a profitCreate a profit--making making corporate culturecorporate culture Pursuit of economy, Pursuit of economy,

zero accidents, zero zero accidents, zero defects, zero failuresdefects, zero failures

1. Aiming to create corporate culture that optimizes

efficiency of production systems (Overall

effectiveness)

2. Structure with an actual scene/actual thing a

system that takes preventive action against loss

such as Zero accidents, zero defects, zero

failures targeting the overall lifecycle of the

production system

3. In all departments including production, HR,

Sales and Administration Departments

4. Participation of by all members of the company,

from top management to frontline staff

5. Achieve zero loss with overlapping small-group

activities

SEIICHI NAKAJIMA

Plant Preventive MedicinePreventive MaintenancePreventive MedicinePreventive Medicine

PhysicalPhysical

Check upCheck up

Daily maintenanceDaily maintenance InspectionInspection

(Diagnosis)(Diagnosis)

Preventive repairPreventive repair

Preventive MaintenancePreventive Maintenance

DailyDaily

PreventionPreventionEarlyEarly

TreatmentTreatment

(Early exchange)(Early exchange)

Prevent

degradation

Measure

degradation

Recover

degradation( ) ( ) ( )

))Clean, Lubricate,Clean, Lubricate,Tighten, Check, AdjustTighten, Check, Adjust((

The Basic Approach to Zero Failure

Equipment does not go wrong by itself: people make it go wrong;

By changing the way people think and act, equipment can be made completely failure-free;

People must stop thinking about equipment beign the problem, and start thinking about themselves as agents who can stop equipment from going wrong, and eventually get rid of failure for good.

The Principles Behind Zero Failure

Bring hidden equipment defects to light and nip them in the bud!

Breakdowns are only the tip of the iceberg

Hidden equipment defects

- Dust, dirt, contamination by

product or materials

- Wear, looseness, slackness, leaks

- Rust, deformation, scratches,

cracks

- Excess heat, excess vibration,

abnormal noise and other

abnormalities

Failure

( Preventing Breakdowns )

F-Tagging

Initial

Cleaning

and

Inspection

TPM Award Onsite TPM Award Onsite AssessementAssessement

Kubota CorporationOkajima Plant

ADEKA Corporation(old Asahi Denka Co., Ltd)

Akashi Factory

TPM Core ValuesTPM Core Values

KAIZEN

PARTICIPATION

&

Growth

MAINTENANCE

JIPMSJIPMSJIPMS

JIPMS,2006

TPM PartsTPM Parts,,,, Concept PictureConcept PictureJIPMSJIPMSJIPMS

JIPM,2002

TargetReduction of manufacturing costs

Build up basic strength of the manufacturing site to contribute to the company management

Reinforcement of QCD (Quality, Cost, Delivery)

Improvement of product quality and equipment development

Create safe and cheerful working environment

PartPart (Level 1) Concept (Level 1) Concept JIPMSJIPMSJIPMS

JIPM,2002

Activity to maximize profit by eliminating and preventing constrains

and losses that impede reduction of manufacturing costs.

Inventory loss Organization loss Change over loss Defect loss Break down loss

Present

TPM -

Constra

ins of re

ducing

manufacturin

g cost

Scope of PartScope of Part (Level 1) (Level 1)

Product flow

OrderShipment

(sales)

Manufacturing site

TPM Part TPM Part

TPM Part

Logistics

Sourcing,

Resource management

Cost controlQAMaintenanceProduction

Sales,Research

Production Engineering

Production control

Development,DesignProduction process

Business process

JIPMSJIPMSJIPMS

JIPM,2002

Target : Reduction of Product Costs

JIPMSJIPMSJIPMS

PartPart (Level 2) New Concepts & Challengers(Level 2) New Concepts & Challengers

Establish a system to reinforce and improve the foundation of themanufacturing site

Establish QCD in development, production and sales Activity of focused improvement to expand added valueActivity of Environmental management

Activity to reduce product costs (total costs) by eliminating and preventing of

constrains and losses.

Product costs = Manufacturing expense + Energy expense +

Logistic expense + Development expense + Sales

expense + General Management expense etc.

Total Cash OutflowTotal Cash Outflow

Innovative TPM approaches to make ourselves stand out from competitorsInnovative TPM approaches to make ourselves stand out from competitors

JIPM,2002

Opportunity lost loss

Additional

construction loss

Sourcing

loss

Organization

loss

Indirect loss

TPM

TPM

Inventory

loss

Change-over

loss

JIPMSJIPMSJIPMS

Product flow

OrderShipment

(sales)

Manufacturing site

TPM Part TPM Part

TPM Part

Logistics

Sourcing,

Resource management

Cost controlQAMaintenanceProduction

Sales,Research

Production Engineering

Production control

Development,DesignProduction process

Business process

Product o

f

manufacturin

g cost

Activity to reduce product costs (total costs) by eliminating and

preventing of constrains and losses.

Scope of Part (Level 2) Scope of Part Scope of Part (Level 2) (Level 2)

JIPM,2002

Part (Production costs) Part (Product costs)

Production siteProduction site Manufacturing ProcessManufacturing Process

Optim

ization of to

tal

manufacturing process

Production Losses in machine operation

Losses in organization for operation

Losses in materials and energy

Production Losses in machine operation

Losses in organization for operation

Losses in materials and energy

Cooperation between production

division and other divisionsSales ,e.g.) Opportunity lost, Product inventory loss

Development & Design , e.g.) Losses due to failure

to achieve new-product target costs

Sourcing , e.g.) Excess parts & materials, Losses due

to failure to achieve purchasing target costs

In Part ,we continuethe work we did in Part , while strengthening functional

links in order to optimize the

entire manufacturing process

JIPMSJIPMSJIPMS

Requirements for Part (Level 2) Requirements for Part Requirements for Part (Level 2) (Level 2)

JIPM,2002

Forecast P

roductio

n(W

e can sell w

hatever w

e m

akeEra)

Forecast P

roductio

n(W

e can sell w

hatever w

e m

akeEra)

Productio

n to

Order

(Needed in

the o

nly m

ake what w

e can sellEra)

Productio

n to

Order

(Needed in

the o

nly m

ake what w

e can sellEra)

Coping with demand uncertainty( Only make what is needed, when it is needed )

Coping with demand uncertaintyCoping with demand uncertainty( Only make what is needed, when it is needed )

Lead TimeLead Time

Too many decision

making steps

Too many decision

making steps

Forecasting of

uncertain demand

Forecasting of

uncertain demand

BottleneckBottleneck

Find constraints and losses to improve lead time, e.g. production planning, production, sourcing,

logistics

Find constraints and losses to improve lead time, e.g. production planning, production, sourcing,

logistics

Distribute order information to

production site by improving

information processing lead time

Distribute order information to

production site by improving

information processing lead time

Establish production system to

correspondence to order without

inventory demand based

Establish production system to

correspondence to order without

inventory demand based

JIPMSJIPMSJIPMS

Direction of solutionDirection of solution

Requirements for Part (Level 2) Requirements for Part Requirements for Part (Level 2) (Level 2)

JIPM,2002

JIPMSJIPMSJIPMS

PartPart (Level 3) (Level 3) -- New Concepts & RequirementsNew Concepts & RequirementsTargetImprovement of Cash Flow

Continue and maintain the basic strength of manufacturing site (Make it routine)Establish QCD in R&D and D&PPReinforce and improve the company-wide added value creation activitiesActivity of environmental and resource management

Activity to eliminate and prevent losses which impede total cash flow.

Re-focus from manufacturing process innovation to entire business process innovation

Re-focus from manufacturing process innovation to entire business process innovation

In part, main objective is how to make profits under the given sales amount (operation hours). However, the sales gradually go down due to the product life cycle.

In Part establishing speedy system to develop and distribute new products that increase total sales is a core activity. In addition, it aims at creating and

strengthening profitable business conditions.

JIPM,2002

JIPMSJIPMSJIPMS

Product Flow

OrderShipment

(sales)

Manufacturing site

TPM Part TPM Part

TPM Part

Logistics

Sourcing,

Resource management

Cost controlQAMaintenanceProduction

Sales,Research

Production Engineering

Production control

Development,DesignProduction process

Business process

Scope of Part (Level 3) Scope of Part Scope of Part (Level 3) (Level 3) Activity to eliminate and prevent constraints and losses

which impede total cash flow.

TPMTPM

Constra

ins of

total cash flo

w

Opportunity lost loss

Additional construction

loss

Sourcing loss

Organization loss

Inventory loss

Change-over loss

Utilizationloss

Less than estimated

profit loss

Overheadcosts loss

JIPM,2002

Part (Production costs) Part (Product costs)Production siteProduction site Manufacturing ProcessManufacturing Process

Losses in machine operation

Losses in organization for operation,

Losses in materialsand energy

Losses in machine operation

Losses in organization for operation,

Losses in materialsand energy

Cooperation between

production division and

other divisions

Requirements For Part (Level 3)Requirements For Part Requirements For Part (Level 3)(Level 3)

Company-wide

Collaboration

including suppliers

& customers

Sales ,e.g.)

Utilization loss

Research , e.g.)

Marketing share

of new products

Productivity of

Production site

Productivity of

Production site

Business ProcessBusiness Process

Part (Total cash flow)

Productivity of

Company

management

Productivity of

Company

management

In PartIn Part, we continue levels , we continue levels 1&2 while driving to optimize 1&2 while driving to optimize

the entire business process.the entire business process.

Optim

ization of to

tal m

anufacturing process

Optim

ization of to

tal m

anufacturing process

Production site

Production site

Optim

ize total business process

Optim

ize total business process

JIPM,2002

In Part II, we continue the work we did in In Part II, we continue the work we did in

Part Part , while strengthening functional , while strengthening functional links in order to optimize the entire links in order to optimize the entire

manufacturing processmanufacturing process

Sales ,e.g.) Opportunity lost,

Product inventory loss

Development & Design , e.g.)

Achievement loss to target cost

on new product

Sourcing, e.g.) Excess parts &

material, target cost loss to buy

JIPMSJIPMSJIPMS