Why we need to use Lean as a productivity improvement tool

Why we need to use Lean as a productivity improvement tool - Description

What is the main objective of a commercial service / manufacturing company?. “A manufacturing / servicing company wants to make something that it can sell to someone for more money than it cost the company to make it , be profitable and grow”. ID: 711677 Download Presentation

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Why we need to use Lean as a productivity improvement tool

What is the main objective of a commercial service / manufacturing company?. “A manufacturing / servicing company wants to make something that it can sell to someone for more money than it cost the company to make it , be profitable and grow”.

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Why we need to use Lean as a productivity improvement tool




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Presentation on theme: "Why we need to use Lean as a productivity improvement tool"— Presentation transcript:

Slide1

Why we need to use Lean as a productivity improvement tool

Slide2

What is the main objective of a commercial service / manufacturing company?

“A manufacturing / servicing company wants to make something that it can sell to someone for more money than it cost the company to make it , be profitable and grow”

Who seems to be the most important person in this equation?

“CUSTOMER”

“ Make Money”

Slide3

Cots & Profits

What are we trying to do?

Traditional approach

Selling Price

= Profit + Costs

Modern concept

Profit

=

Selling Price

- Costs

In competitive globalized market “Selling Price set by the customers…….

If costs goes up …. What happens to the “Profits” ?

Slide4

Cost

ProfitGlobally Competit-ive costProfitCosts Plus(in the past)Cost down(Now)

Company asking priceGlobal market priceCustomer Price reductionInternal cost increases

Need to reduce waste through Continuous ImprovementRs.TimeWhy need to reduce cost of manufacturing ….

Slide5

Example

Scenario 1: First baker- cost of manufacturing a burger bun – Rs.30 …….…and market selling price is Rs.55Profit = Selling price - costTherefore, Rs 25= Rs.55 – Rs.30 Scenario 2: Second baker- the cost of manufacturing - Rs.25Then his profit will be:Rs 30 = Rs.55 – Rs.25Scenario 3: Second baker decides to drop the selling price by Rs. 5 to Rs.50 still he will end up making same profit as the first baker…. Long run what will happen to the first baker …..

Slide6

What cause inefficiencies in a process

Slide7

Process

IN PUTS = XOUT PUTS = Y< XWASTE.... Z = X- Y

General form of any activity (a process) ….

Slide8

IN PUTS = X

OUT PUTS = Y< XWASTE.... Z = X- Y

Any Organization consists of smaller departments or collection of processes …

Slide9

IN PUTS

OUT PUTSWASTE....

What decides the efficiency of a business ?

Reduce the waste in each department (or process) in order to increase the out put

Slide10

The system model

InputsProcessOutputsWhat the customer seesManMachineMaterial

QualityCostDeliveryQuality

DeliveryPriceMethod

Slide11

Lean approach to productivity improvement

Slide12

In Lean, all value is defined from the vantage point of the customer…….

“Does this activity directly contribute to my customer’s product’s becoming more complete, and is the customer paying for this activity to occur” Value added activities..The product/ service has been physically changed, and its value to the customer has increased.Non-value added activities (Muda)Activity that consumes time (people expenses), material, and/ or space (facility expenses), yet not physically advance the product or increase its value.

Required non-value added activities..Supplying products to Government agencies requires certain formalitiese.g. Preparing the pay roll for the workforce…

Slide13

Three Tests for Waste

Does the event or action physically transform the product in some way? If so, it probably adds value.If the customer observe the event, would he balk at paying the cost? If so, the event probably does not add value.If the event were eliminated, would the customer know the difference? If not, the event is probably non-value added.

Slide14

Process

IN PUTS = XOUT PUTS = Y< XWASTE.... Z = X- Y

What is waste ?Lead Time& inventory (WIP)

Slide15

‘Lead Time consists of time taken for activities in each department’

Order entryMaterial orderingProduction PlanningManufacturingPackingWarehousing

Lead Time

Primary purpose of applying lean is to … reduce the “Lead Time”

Slide16

Time taken for the journey is directly proportional to the strategy planning of resources & effective implementation.

Equipment

material

man

energy

【INPUT】

     

Normal Strategy Planning & implementation

【OUT PUT】

Result

【INPUT】

 

Good Strategy Planning & implementation

【OUT PUT】

Result

Aim for minimizing INPUTs to gain greater outputs

Slide17

Taiichi Ohno

Shingeo Shingo

Quotes from the Gurus….

“ The most important objective of the Toyota System has been to increase production efficiency by consistently and thoroughly eliminate waste”

“Total elimination of waste is the basic principle of the Toyota System, and if one cannot understand the basics, correct understanding of the whole is impossible”

Slide18

Slide19

Designing and Implementing a Lean Manufacturing strategy.

Ohno’s Mental Model at Toyota

Slide20

$

Another words …..Reduce the time line between “Order To Cash”

OrderCash

Slide21

Cash Flow

Positive (Good)Negative (Bad)Spend MoneyReceive Money

Slide22

$

Order

CashLead time 3 monthsInvest Rs.100 with intended profit of Rs10Receives Rs.110 after three months$

OrderCashLead time 1 monthsReceives Rs.110 after one monthsX 1Receives Rs.220 after two monthsReceives

Rs.330 after three monthsX 1

Slide23

Japanese Sushi Shop

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Slide24

What is waste ?

Types of waste in a process and how to define and identify waste

Slide25

There are three main categories of wastes

MudaMuraMuri“3 M” in Lean Manufacturing

Slide26

Mura

Mura is the waste of unevenness or inconsistency. Mura creates many of the seven wastes that we observe, Mura drives Muda! By failing to smooth our demand we put unfair demands on our processes and people and cause the creation of inventory and other wastes.

Slide27

“The slower but consistent tortoise causes less waste and is much more desirable than the speedy hare that races ahead and then stops occasionally to doze. The Toyota Production System can be realized only when all the workers become tortoises.

- Ohno, 1988 -

Slide28

Slide29

Muri

Muri is to cause overburden, by this we mean to give unnecessary stress to our employees and our processes. This is caused by Mura and a host of other failures in our system such as lack of training, unclear or no defined ways of working, the wrong tools, and ill thought out measures of performance.

Slide30

Examples of

Muri are;Working on processes you are not trained inPoorly laid out work placesUnclear instructionsLack of proper tools and equipmentFluctuating demand (Mura)Lack of proper maintenance / unreliable equipmentUnreliable processesPoor communication routes

Slide31

5S

; This extremely simple yet powerful methodology tackles a wide range of overburden within any workspace. It seeks to remove unreasonable movement and stress by ensuring that everything is exactly where it should be for the most efficient use. It also ensures that your layout is clear and that deviations from what is required are obvious to everyone enabling issues to be corrected immediatelyHow to Remove or Reduce MuriStandardization; 5S begins the process of standardization for your processes. Having your processes fully documented and everyone trained in the best way of performing them ensures that everyone is able to do the work easily and in the best way possible. Standard Operating instructions or Procedures allow you to easily communicate the best ways of doing things.TPM; Total Productive Maintenance is another lean manufacturing tool that should be fully implemented if you want to reduce the Muri within your processesSMED; Single Minute Exchange of Die is a simple process related to 5S and to TPM that concentrates specifically on machine setup. We reduce setup times to ensure that we have the flexibility with our machines to run smaller batches helping us to smooth out our production and make things more flexible.

Slide32

‘No

5S … forget Lean’5S is the kindergarten of Lean ….. This is where simple Kaizen’s , 5Y’s and basic brainstorming, teamwork etc. all begins……

Slide33

Mura

(Unevenness in productivity & quality)+Muri

Overburden of machines, managers, and production associates)Muda(7 Waste)

+ Other conditions

Slide34

Muda

is a by product of human activities and thoughts and there are seven (eight including not harnessing human talent ) categoriesMuda

Slide35

8 Wastes……

Slide36

TIMWOODS

Slide37

1- transportation

Transport waste is material movement that is not directly associated with a value adding process.Processes should be as close to gather as possible and material flow directly from process to process without any significant delays in betweenExcess transportation may be caused by ;Poor layoutsLarge distances between operationsLengthy or complex material handling systemsLarge batch sizesWorking to faster rate than the customer demand( Over production)Multiple stoppage locations

Slide38

Over production and inventory hides the causes of waste ….

2- INVENTORY

Slide39

Waste of motion is any motion of man and / equipment that does not add value to the product or services

Wasteful motion is caused by :Poor workstation layout- excessive walking, bending, reachingPoor method design – transferring parts from one hand to anotherPoor workplace organizationLarge batch sizesReorientation of material3 - MOTION (People)

Slide40

4 - waiting

People or parts waiting for a work cycle to be completedDelay in information flowWaiting caused by;Process bottlenecksLack of machine availabilityMaterial shortagesUnreliable suppliersLack of multi-skilling or flexibilityDowntimeIneffective maintenancePoor quality (Rework)Lost itemsInsufficient communicationPoor work balance

Slide41

5 – over production

Over production is the worst kind of waste because it causes other form of waste and obscure the need for improvementOver production waste results from producing more (or faster) than required.Over production is caused by;Large batch sizesUnpredictable processesUnbalanced cells / departmentsWorking to forecast / inaccurate information / not actual demand

Slide42

Over processing is putting more into the product than is valued by the customer,

Painting of unseen areasUnnecessary tight tolerancesCleaning and polishing beyond the level required.The goal is to do only the level of processing to match that which is useful and necessary.Over processing caused by;No standardization of best techniquesUnclear specifications/ quality acceptance standards6 - OVER PROCESSING

Slide43

7 - defects

Waste of correction including additional work performed on a product or serviceCaused by or unclear operating procedure / specificationsDefects are caused by Inadequate trainingSkills shortageIncapable processesIncapable suppliersOperator errorExcessive stockstransportation

Slide44

MEN

MACHINESMATERIALSMotionTransportationWaiting timeOver productionDefectsOver Process Inventory

Method

How all wastes relate to 4M’s

Slide45

Effect of waste reduction…

Slide46

Barriers to implement lean

Slide47

If we all know we need to improve, the question becomes: why don’t we?

BARRIERS TO IMPROVEMENT

Slide48

Barriers to success…

Culture……Output is kingFirefighting and quick fixesPoor support systemPoor communicationDriven purely through technical departmentEmployees not paid to thinkDemarcation – not my job

Slide49

Barriers to success…

Fear of change, or of failureFear of doing yourself out of a jobAll talk no actionLack of visible management support and commitmentInadequate training, hence lack of understandingPoor fundingUnwillingness to expose and face problems initiative fatigue …. Etc…

Slide50

Introduction to process symbols and how to identify waste in a process

Slide51

What is a process….

Slide52

Definition of a process

An orderly, prescribed sequence of events intended to produce a product or outcome… … Cambridge Dictionary.

Slide53

Symbol

NameActionExamplesOperationAdds ValueSaw, Cut, paint, Solder, CuttingTransportMove some distanceConveyor, Forklift, TruckHandlingTransfer or sortRe-packing, transfer to conveyor

InspectionCheck for defectsVisual / Dimensional inspectionDelayTemporary delay/ holdWIP, Hold, QueueDecideMake a decisionApprove, denyStorageFormal warehousingWarehousing, truck

Process Chart Symbols

Slide54

Process sequence charts

ls%hj,shka

(Operation);djld,sl .nvdlsrSï (Temporary storage or delivery ) m%jdykh- (Transport);;a;aj

mrSCId lsrSu (Inspection)l%udKql+, .nvdlsrSu (Controlled storage)Which steps really add value to the operation?

Slide55

Thank you.