INTRODUCTION TO LEAN

MANUFACTURING

Achieving World-Class Organizational Results

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Introduction To Lean
WHAT IS LEAN MANUFACTURING?

Lean Manufacturing can be defined as "A systematic

approach to identifying and eliminating waste (non-value-
added activities) through continuous improvement by
taking the product through flow processes based on a
signal from the customer."

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WHAT LEAN MANUFACTURING IS NOT?

Lean manufacturing is NOT a single tool that can be

implemented in one phase and result obtained
immediately. Lean is a combination of many tools that can
be implemented in all departments and results are
obtained usually after 12 months. Lean is NOT a quick fix
solution for daily problems.

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Introduction To Lean
What is Lean Manufacturing?
 Lean manufacturing is the process of analyzing the flow of information and
materials in an environment and continuously improving the process to
achieve enhanced value for the enterprise.

 It uses the building blocks of: standardized work, workplace organization,

visual controls, effective plant layout, quality at the source, batch reduction,
teams, customer demand-based manufacturing, point-of-use storage, quick
changeover, one-piece flow, cellular manufacturing, and Takt time.

 Lean manufacturing also applies the modern elements and technologies of

scrap reduction, process improvements in machining and tool selection as
well as material selection, set-up reduction, Just-In-Time, Kaizen, world
class manufacturing, synchronous manufacturing, and inventory
management.

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 Introduction To Lean
CUSTOMER FOCUS
A lean manufacturing enterprise thinks more about its
customers (internal & external) than it does about running
machines quicker to absorb labor and overhead.

Ensuring Internal and External customer input and

feedback assures quality and customer satisfaction,

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FOCUS ON WASTE
The aim of Lean Manufacturing is the elimination of waste
in every area of the organization including

•Customer Relations (Sales)

•Accounting
• Product design
• Supplier Networks
•Quality
•HR
•Safety
•Manufacturing
•Engineering

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Introduction To Lean
LEAN GOALS

Goal is to IMPROVE EVERY PROCESS WITHIN AN

ORGANIZATION REQUIRING:

Less human effort

Less materials
Less inventory
Less time
Less space

To become highly responsive to customer demand while producing top quality

products in the most efficient and economical manner possible

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Introduction To Lean
 In 1945, Toyoda (founder of Toyota Company)
challenged Taiichi Ohno to learn how to compete
with US Automakers not on building large
volumes of similar models, but many models in
low volume.
 Ohno was given 3 years to develop a system to
achieve this goal.

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 Ohno went to the US and studied Ford mass
assembly processes at the Rouge River Plant.

 Ohno learned a lot from this experience, but felt

Ford stopped short of a better system.

 Ohno also studied the supermarket concept of

ordering and replenishing stock by a signal system.
This resulted in Ohno applying the KANBAN
concept to the system he would develop.
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 It took Ohno over 20 years to develop the

system that became known as The Toyota
Production System (TPS)

 It took until the 1974 Oil Crisis before

outsiders and others in Japan really took
notice of the TPS system that Ohno built and
the way it was allowing Toyota to compete
when others were faltering.
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Introduction To Lean

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Typical use of automation which results in running parts faster and faster but result in increased inventory
as downstream cells cannot use the product as fast as the upstream equipment is producing the parts.
Increases inventory which is waste

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 Lean Manufacturing came to the US with

James Womack’s Book, “ The Machine That
Changed The World” in 1990.

 Focused on Toyota Production System

Concepts and Why Toyota was able to so
successful over US Auto Manufacturers.

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Benefits of Lean Production

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Lean terminology glossary
Following is a short list of terms often used in explaining lean manufacturing
techniques.
Cellular Manufacturing - linking of manual and machine operations into the
most efficient combination to maximize value-added activities while minimizing
waste. A cell layout is typically U-shaped and utilizes one-piece flow.
Kanban System - a pull system that uses color-coded cards attached to parts
or part containers to regulate the upstream production and delivery flow.
Lean Manufacturing - the process of analyzing the flow of information and
materials in a manufacturing environment and continuously improving the
process to achieve enhanced value to the customer.
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 terminology glossary
Pull System - method of controlling the flow of resources by replacing only what
has been consumed. A pull system relies on customer demand.

Push System - resources are provided to the consumer based on forecasts or

schedules. (Lean manufacturing encourages the elimination of push systems)

Takt Time - customer demand rate. Takt time sets the pace of production to
match the rate of customer demand and becomes the heartbeat of any lean
system. It is calculated by taking the work time available and dividing it by the
number of units sold

Value Added - Any activity that increases the market form or function of the
product or service (These are the positive attributes a customer is willing
to pay)

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 Most waste is invisible and elimination is not easy. A set of
techniques that identify and eliminate waste has evolved into "Lean
Manufacturing."

 Cellular Manufacturing
 Takt Time
 Kanban
 Setup Reduction
 Implementing Kaizen
 Group Technology
 Small and frequent lot sizing

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TOOLS ASSOCIATED WITH LEAN

Transforming small manufacturers to high performance requires that they address

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Introduction to Lean

Start

Understand the Current State

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Improve processes (manufacturing; engineering; HR; Safety; Quality; Sales;
Accounting) by looking at building “cells” of operations that are small complete
factories of their own instead of moving products, materials and information by
large lots throughout a large facility or office- Quick response Processing results

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 A work cell is a work unit larger than an individual
machine or workstation but smaller than the usual
department. Typically, it has 3-12 people and 5-15
workstations in a compact arrangement.
 An ideal cell manufactures a narrow range of highly
similar products/information/processes. Such an ideal cell
is self-contained with all necessary equipment and
resources.
 Cellular layouts organize departments around a
product/information/process or a narrow range of similar
products. Materials sit in an initial queue when they enter
the cell.

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 Once processing begins, they move directly from
process to process (or sit in mini-queues). The result
is very fast throughput.
 Communication is easy since every person is close
to the others. This improves quality and coordination.
Proximity and a common mission enhance
teamwork.
 Simplicity is an underlying theme throughout cellular
design. Notice the simplicity of
material/information/process flow. Simpler
Scheduling, supervision and many other elements
also reflect this underlying simplicity.

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This complicated flow becomes a much improves and simpler flow

between areas that are adding value

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Lean – How different &
beneficial?
Key Element Functional Cellular
Inter-department Moves Many Few
Travel Distance 500'-4000' 100'-400'
Route Structure Variable Fixed
Queues 12-30 3-5
Throughput Time Weeks Hours
Response Time Weeks Hours
Inventory Turns 3-10 15-60
Supervision Difficult Easy
Teamwork Inhibits Enhances
Quality Feedback Days Minutes
Skill Range Narrow Broad
Scheduling Complex Simple
Equipment Utilization 85%-95% 70%-80

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An Example
 A firm that assembles air-handling products faced high
inventories and erratic delivery. They originally assembled
units on a traditional line. Long setups and logistics
required long production runs. Often, they pulled products
from finished goods and rebuilt them for custom orders.

 Twelve small (1-3 person) assembly work cells that were

always set up and ready. People worked in different cells
each day and assembled to customer order. Finished Goods
Inventory dropped by 96%. Lead-time was 24 hours.
Productivity improved by 20%-30%.

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Traditional Lean
Manufacturing Manufacturing

Scheduling Forecast - push Customer Order - pull

Production Stock Customer Order

Lead Time Long Short

Batch Size Large - Batch & Queue Small - Continuous Flow

Inspection Sampling - by inspectors 100% - at source by workers

Layout Functional Product Flow

Empowerment Low High

Inventory Turns Low - <7 turns High - 10+

Flexibility Low High

COGS High and Rising Lower and Decreasing

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Continuous Improvement Firm (CIF) versus Mass Production (MP) firm
Issues MP CIF
Strategic advantage Large volume of homogenous Production flexibility
output
Workforce Narrow specialization Multi-skilled
Output based on Forecasted demand Real demand
Productivity success Quality of management its The ability of the entire
factors ability to plan and to direct the work force, not just
implementation of those plans management, to
constantly improve both
the product and the
processes whereby it is
produced

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Introduction To Lean

DEFINITION OF WASTE

Essentially, "waste" is anything that the

customer is not willing to pay for.

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8 TYPES OF WASTE
 TRANSPORTATION
 WASTED MOTIONS
 EXCESS INVENTORY
 WAIT TIME
 SCRAP OR REWORK
 OVER-PROCESSING
 OVER-PRODUCTION
 UNDERUTILIZED HUMAN RESOURCES

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Waste In Organizations is
usually termed as following

 Lost Time/Injury  Calibrations

Accidents  Inventory Storage
 Scrap/Rework  Counting Inventory
 Machine Setups  Supplier Lead-times
 Machine Downtime  Product Test
 3rd Party Inspection  Profit Reductions
 Falling Market Share

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 Wastes
Administrative Waste
 Conflicting Department Goals – not everyone on the same page
 Traditional Accounting Methods – rewarding people for creating
waste, for example; inventory
 Poor Product Design – designs which do not include the needs of
the internal and external customers
 Long Order Processing Time
 Searching, Hunting, Looking – for files, orders, invoices, reports,
memos etc.
 Waiting Time – waiting for batched paperwork, instructions,
supervision etc.
 Purchasing Reorders, Transactions
 Authorizations

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What Types of
Wastes Do You Have
in Your Facility?

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Eliminating Waste

Improves our ability to

provide customer satisfaction,
while reducing overall costs!

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Overproduction
To produce more than is sold or produce it
before it is needed.
 It is visible as storage of material.
 Overproduction means making more than is:
 Required by the next process
 Making earlier than required by the next process or
making faster than required by the next process.

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Causes for Over Production

 Just-in-case logic
 Misuse of automation
 Long process setup
 Unleveled scheduling
 Unbalanced work load
 Over engineered
 Redundant inspections

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WAIT TIME

Any time that is non-value added where the

operator must stop producing good parts and
wait for: materials; instructions; Team Leader;
equipment downtime.

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Causes of Wait Time Waste

 Unbalanced work load

 Unplanned maintenance
 Long process set-up times
 Misuses of automation
 Upstream quality problems
 Unleveled scheduling
 Poor Communication

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Inventory or Work in Process (WIP) Waste

Represents the material between operations

due to large lot production or processes with
long cycle times

One of the most frequent types of waste and

one of the most expensive to have

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Causes of Excess Inventory

 Compensating for inefficiencies and unexpected

problems
 Product complexity
 Unleveled scheduling
 Poor market forecast
 Unbalanced workload
 Unreliable shipments by suppliers
 Misunderstood communications
 Reward systems

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Over Processing Waste

Doing more processing to the parts than the customer

really requires

Over processing waste can be minimized by asking

why a specific processing step is needed and why a
specific product is produced.

All unnecessary processing steps should be

eliminated.

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Causes for Over Processing Waste

 Product changes without process changes

 Just-in-case logic
 True customer requirements undefined
 Over processing to accommodate expected downtime
 Lack of communication
 Redundant approvals
 Extra copies/excessive information

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Transportation Waste
Excess Material Handling either to production
area or within production areas.

Does not add any value to the product. Instead

of improving the transportation, it should be
minimized or eliminated (e.g. forming cells)

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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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WASTED MOTIONS

Any movement that does not add value.

Examples: looking for tools; walking many

steps to get parts or place parts into finished
goods; more movements than necessary to
perform an operation.

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Causes of Motion Waste

 Poor people/machine effectiveness

 Inconsistent work methods
 Failure to take ergonomic issues into consideration
 Poor facility or cell layout
 Poor workplace organization and housekeeping
 Extra "busy" movements while waiting

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SCRAP OR REWORK

Requires additional resources and time to

correct defects before shipping or replace
parts that are scrapped due to defects.

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Causes of Scrap or Rework

 Little or no process control

 Poor quality standards or inconsistent quality
standards
 Lack of or little planned equipment preventive
maintenance
 Inadequate education/training/work instructions
 Product design (Process cannot produce to quality)
 Customer needs not understood

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UNDER-UTILIZED HUMAN RESOURCES

The lack of involvement and participation of

the employees in improving operations;
quality and safety.

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Causes of People Waste

 Old guard thinking, politics, the business culture

 Poor hiring practices
 Low or no investment in training
 Low pay, high turnover strategy
 Management thinking it has to “drive” everything
instead of involving those who know the process the
best

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10 Commandments of Lean

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Introduction To Lean
SOME BASIC ELEMENTS OF LEAN

Elimination of waste
Equipment reliability
Process capability
Continuous flow
Material flows one part at a time
Less inventory required throughout the production process,
 raw material, WIP, and finished goods
 Defect reduction
Lead time reduction
Error proofing

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 Stop the Line quality system
 Kanban systems
 Standard work
 Visual management
 In station process control
 Level production
 Takt Time
 Quick Changeover
 Teamwork
 Point of use storage
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KAIZEN
The definition of Kaizen is "improvement"
and particularly------"Continuous Improvement"–
slow and incremental but constant
Small-scale improvements are easier and faster.
The risks are lower because they generally have
limited effect.

However, the accumulated effect is often greater

than a single large improvement

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Takt Time
The desired time between units of production and
output, synchronized to customer demand.

The concept carries backward through a process

stream. Ideally, every step synchronizes with the
final output. Takt Time is fundamental to Lean
Manufacturing.

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Takt time is useful for lean cells These are typical
of the work cells at Toyota and what most people
think of when they picture a cell.

Such cells have:

 Minimal Setups
 A Single Routing
 Identical Work Times for All Products
 Job-shops and other low-volume, high-variety
operations can also use cellular manufacturing,
it's just a bit more complicated

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 Small lot production (ideally one piece) is an

important component of any Lean strategy

 Lot size directly affects inventory and scheduling

 The larger the lot size the more time, materials,

money, inventory, lead time, scrap is produced
and lead time and scheduling is extended

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