Fundamentals of Leandspace.mit.edu/bitstream/handle/1721.1/35257/16... · @ 80% BTP zz Release months yy months 0 months Iterate Test System • Develo ment • Ver ifc at on •

Deborah Nightingale © 2002 Massachusetts Institute of Technology 1

Fundamentals of Lean

Professor Deborah Nightingale September 9, 2002


Lean is a New Approach to Managing Enterprises

¾ Origin and evolution of lean concepts ¾ Core lean principles & practices ¾ How lean differs from craft and mass

production models of industrial organization ¾ Lean implementation steps ¾ Value stream mapping


Lean was Born out of Necessity: How to Withstand the Mass Production Behemoths

¾ On August 15, 1945 -- end of war with Japan -- Toyota faced a daunting challenge: How to succeed against Western mass production auto giants poised to enter Japanese market?

¾ Kiichiro Toyoda to Taiichi Ohno (father of lean production): “Catch up with America in three years.”

¾ Ohno’s challenge: How to design a production system exploiting central weaknesses of mass production model

¾ Japan faced many dilemmas: small & fragmented market, depleted workforce, scarce natural resources, little capital

¾ Lean evolved as a coherent response to this challenge over a number of decades -- a dynamic process of learning and adaptation later labeled as “lean production” by Western observers


Lean Response: Use Less of Everything, Offer Greater Variety of Higher Quality & More Affordable

Products in Less Time

¾ Best Japanese auto companies developed afundamentally different way of making things

¾ These companies changed the dynamics ofinternational competition

¾ New goals in manufacturing systems --combined benefits of craft and mass production ¾ Improved quality ¾ High productivity ¾ Efficiency at low volumes ¾ Production flexibility ¾ Rapid, efficient development cycle ¾ Product mix diversity

¾ Lean production contrasts with traditionalmass production paradigm

¾ Systemic principles are transferable


What

The removal of muda! Muda- Is a Japanese word for waste Waste- any activity that absorbs resources & creates no

value!

Source: by Womack & Jones

is Lean Thinking?

LeanThinking


More Japanese Terms

¾ Kaikaku- radical improvement

¾ Kaizen- continuous incremental improvement


Taiichi Ohno (1912-1990) Toyota Executive

¾ Types of Muda: ¾ Mistakes which require recertification

¾ Production of items no one wants

¾ Processing steps which really aren’t needed

¾ Employee or goods movement/transport from one place or another without any purpose


Taiichi Ohno (1912-1990) Toyota Executive

¾ Types of Muda: ¾ People in downstream activity waiting because

upstream activity has not delivered on time

¾ Goods and services that don’t meet the need of customer


Antidote to Muda: Lean Thinking

¾ Provides way to specify value ¾ Line up value creating actions in best sequence ¾ Conduct activities without interruption whenever

someone ¾ Perform them more and more effectively ¾ Provides a way to make work more satisfying

requests them


Lean Thinking is the Dynamic Process of Eliminating Waste with the Goal of Creating Value for all

Enterprise Stakeholders

¾ Customer-focused: “pull” enterprise activities

¾ Knowledge-driven: Draws upon knowledge and innovation from everyone -- workers, suppliers

¾ Eliminating waste: Stresses elimination, not just reduction, of all types of waste

¾ Creating value: Puts premium on “growing the pie”, not just reducing costs, to benefit all stakeholders

¾ Dynamic and continuous: Pursues on-going systemic as well as incremental improvement -- both innovation and continual improvement

Customer needs and expectations


Lean Encompasses a Set of Mutually-Positively-Reinforcing Concepts, Practices and Tools Creating

a Virtuous Cycle

¾ Synchronizing flow and pull: “Pull” based just-in-time production enabled by kanban system

¾ Striving for perfect quality: Completely defect- free parts must flow to each subsequent process; variability reduction; quality designed-in, not based on inspection

¾ Flexibility and responsiveness: Small lot sizes and quick set-up times; ability to respond to shifts in demand

¾ Trust-based relationships: Mutual commitments and obligations, internally and externally with suppliers

¾ Continuous improvement (Kaizen): Continuous improvement through work standardization, productive maintenance, error proofing, root cause analysis, and worker training & empowerment


5 Steps to Becoming

Lean

Northrop Grumman ISS

* 4

3 2

1

5


1. Define Value 2. Identify the Value

Stream 3. Flow the Product 4. Pull

5. Strive for Perfection

Customer Follow the Product

Eliminate Waste Produce Just-in-Time Continuously Improve

5 Steps to Becoming Lean


Definition

Information/Material in a Form That theCustomerCustomer Is Willing to Pay for

Value is DefinedDefined by the Customer Value is CreatedCreated by the Producer

1. Define Value


Who’s the customer?

CCuseruser

CCshareholdershareholder

CCenvironmentalenvironmental

CCemployeeemployee

Who’s the Customer?


The Value Stream Consists of Tasks Required to Bring a Specific Product Through Three Critical Processes: Design -Problem-solving From Concept Through Detailed Design and Engineering to Production Launch

Order -Information Management From Order-taking Through Detailed Scheduling to Delivery

Make -Physical Transformation from Raw Materials to Finished Product In the Hands Of the Customer

C U S T O M E R

2. Identify the Product’s Value Stream

the Actual

Product: Component

Procurement

Supplier: XXX

Product: Vehicle

Customer: U.S. Government

Value: – Affordable – High Quality – High Performance

Product – On Time Delivery

Perform Detail Design

J. Wessels 4/27/2001 Rev. 4

- Specs - Environmental

Criteria - Standard Parts - Standard Designs - Design Handbook - Geometric Design &

Tolerancing - Mfg. Process

Capability - Etc.

Des. Ref. Library

Release BTP

• Build to Package • Buy to Package • CDRLs • Reports

Des.Proc. Guidance

- Design for Manufacturing

- Design for Assembly

- Design to Cost - Design for Key

Characteristics - Design for

Supportability - Design for 6 Sigma - Design for ..........

Define Structural Arrangement

• Finalize Conceptual Design • Conduct Structural

Configuration/Cost/Mfg. Trades • Perform Airframe Analysis

- Weights - Finite Element Model - Environmental Model - Internal Loads - Observability Model

• Develop Material Allowables • Define Arrangement

- Production Breaks • Develop ICDs

Prepare Prelim.Design

• Develop Layouts • Create Assemblies • Create Sub-Assemblies • Perform Structural Analysis

- Stress - Environmental - Weight

• Production Factory Requirements Analysis

• Develop Adv. Mfg. Plan Tooling & Mastering Concepts

• Design Parts & Details

• Perform Structural Analysis

Pre-Contract Req’m’nts &

Concept’l Des.

Component Procurement Spec

To All Processes Shown

Manage Program

Systems Engineering

Manage Team Apply Program Plans Apply Technical Plans Apply Processes & Tools Apply Resources

Allocate Requirements to Component Allocate Requirements to Structure

Prime System Spec

Prime Contractor/

Team Process

System Req’m’ts Review

Prelim. Design Review

Critical Design Review

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months yy

months 0

months

Iterate

Test System

• Development • Verification • Validation

Program Req’m’nts

SEMP Req’m’nts

Structure Specs ICDs

System Design Review

Produce Product

• Fab Tooling • Build & Inspect • Deliver

Analyze Rework Root Cause

Procure Suppliers

• Build and • Assemble

Change / Rework

Iterate

xx months

Example: Structural Design Value Stream Map


2. Piece Where possible

3. Focus on the Product and Its Needs Rather Than the Organization or the Equipment

1. Activities That Are Pure Waste

4. Focus on actual object and never let it out of sight from beginning to completion

5. Ignore traditional boundaries of jobs, careers, functions, and organizations to form a Lean enterprise removing all impediments to the continuous flow of the product

6. Rethink specific work practices and tools to eliminate backflows, scrap, and all stoppages

3.

Prefer One Flow

Eliminate

Flow the Product


What Is a Value-Added Activity?

A value-added activity is any action that transforms information/material into a capability for our ultimate customer at

the right time and the right quality.

Definition


Definition

Any Activity That Consumes Resources Yet Adds No Value

Waste


Batch Production Example

A C D = Different Processes

Processing Time = 1Min./ Unit

0 A C D E L A P S E D

T I M E

M I N

Processes - Oriented Layout With Transfer Lot Size of Five

5 A C D

10 A C D

15 A C D

20 A BB D

Throughput Time (5 Units) =

5x1 + 5x1 + 5x1 + 5x1 =

20 Min.

Work in Process

5 + 5 + 5 + 5 =

20 Units

B

B

B

B

B

C


Batch Production Example

A D = Different Processes


0 A C D E L A P S E D

T I M E

M I N

Processes - Oriented Layout With Transfer Lot Size of Five

5 A C D

10 A C D

15 A C D

20 A BB D


5x1 + 5x1 + 5x1 + 5x1 =

20 Min.

Work in Process

5 + 5 + 5 + 5 =

20 Units

C B

B

B

B

B

C

A C 1

A C 2

A C 3

A C 4

A C 5

A C 0

Product-Oriented Layout With Lot Size Of One

E L A P S E D

T I M E

M I N

6 A C

7 A C

8 A C

One - Piece Flow Example




1x4 + 1x1 + 1x1 + 1x1 + 1x1 =

8 Min.

Work in Process

1 + 1 + 1 + 1 =

4 Units


B D

B D

B D

B D

B D

B D

B D

B D

B D

B

A C 1

A C 2

A C 3

A C 4

A C 5

A C 0

Product-Oriented Layout With Lot Size Of One

E L A P S E D

T I M E

M I N

6 A C

7 A C

8 A C

One - Piece Flow Example




1x4 + 1x1 + 1x1 + 1x1 + 1x1 =

8 Min.

Work in Process

1 + 1 + 1 + 1 =

4 Units


B D

B D

B D

B D

B D

B D

B D

B D

B D

B


4.

¾ Definition ¾ Letting the Customer Pull

Value from the Enterprise ¾ Don’t Make Anything Until It

Is Needed ¾ Then Make It As Quickly As

Possible

Pull


Pull

¾ Concept of letting the customer pull product from as needed instead of pushing it on them

¾ Reduces inventories and produces one time cash windfall & return on investment


5.

¾ Definition ¾ Continuous Process

Improvement ¾ Pursue Perfection, Not

the Competition ¾ There Is No End to the

Process of Reducing Efforts, Space, Costs and Mistakes

Strive for Perfection


Perfection

¾ Continuous radical and incremental improvement

¾ Continuous banishment of muda


Seven Categories of Waste

¾ Over Production …………...… Making Ahead of Demand

¾ Waiting ………………………... Delay From Previous Processing Steps

¾ Transportation ……………….. Unnecessary Transport of Materials

¾ Over Processing …………….. Doing More Than Is Necessary

¾ Inventories ……………………. More WIP Than the Absolute Minimum

¾ Movement …………………….. Unnecessary Movement of People

During the Course of Their Work

¾ Making Defective Products … Products Do Not Meet Customer Requirements

Some General Product Definition Wastes

• Task to Be Accomplished (New, In-work, etc.)

• Undocumented Information

• Prioritization • Too Much

Information

• Inaccurate / Incomplete Information

• Inadequate Analysis • Requirements Creep • Change / Multiple Tools • Inadequate Testing

• Generating More Info Than Required

• Excessive Iterations, Don’t Stop at Good Enough

• Fine Tuning Beyond Required

• Over Designing • Unnecessary Interim

Drawings for Build • Over Analysis • Excessive Test Points • Duplicate Tasking

• Tasks Finished Before Required, e.g. Making Drawings Before They Are Needed • Access to Data Storage

• People Are Not Co-located • Walk to Tools (Printer, Copier,

CADAM, Etc.) • Hand Carry Product for Signatures • Travel to Meetings

• Transferring Data From One Database to Another

• Physical Movement of Product • Unnecessary Movement of Data

(Physical or Electron Flows)

• Required to Stop a Given Task Due to Unavailable, Inaccurate, And/or Late Information

• Jobs in Queue Waiting for Resources

• Setup Time (Computer Logon, Printers, Xerox, etc.)

Seven Types of

Waste Making Ahead of Demand

Delay From Previous Processing Steps

Unnecessary Transport of Materials

Doing More Than Is Necessary

More WIP Than the Absolute Minimum

Unnecessary Movement of People During the Course of

Their Work

Products Do Not Meet Customer Requirements

Making Defective Products (Rework)

Inventories

Waiting

Movement

Transportation

Over Processing

Over Production


Exercise – Specific Examples You Encounter

Seven Types of

Waste Making Ahead of Demand

Delay From Previous Processing Steps

Unnecessary Transport of Materials

Doing More Than Is Necessary

More WIP Than the Absolute Minimum

Unnecessary Movement of People During the Course of

Their Work

Products Do Not Meet Customer Requirements

Making Defective Products (Rework)

Inventories

Waiting

Movement

Transportation

Over Processing

Over Production



Apply Five Simple Principles:

¾ Specify value from the standpoint of end customer

¾ Identify the value stream for each product family

¾ Make the product flow

¾ So the customer can pull

¾ As you manage toward perfection


Lean Thinking Differs Sharply from Craft and Mass Production in Important Ways

FOCUS CRAFT MASS PRODUCTION

LEAN THINKING

Focus Task Product Customer

Operations Single items Batch and queue Synchronized flow and pull

Overall aim Mastery of craft

Reduce cost and increase efficiency

Reduce waste and add value

Quality Integration (part of craft)

Inspection (a second stage, after production)

Prevention (built in by design & methods)

Business strategy

Customization Economies of scale and automation

Flexibility and adaptability

Improvement Master-driven continuous improvement

Expert-driven periodic improvement

Workforce-driven continuous improvement

Source: Lean Aerospace Initiative


Value Stream Mapping


SUPPLIERS

The CUSTOMER’S CUSTOMERS

CUSTOMER VALUE

STREAM

FLOW

VALUE

PULL

PERFECTION

The EXTENDED ENTERPRISE NORTHROP GRUMMAN

Lean/Value Stream Philosophy


What is a Value Stream Map?

¾ A Visual Representation of Every Process in the a Product’s Path from Order to Delivery

¾ Includes: ¾ Information and Materiel Flow Integration ¾ Product Through-Put and Cycle Times ¾ Resources Utilized ¾ Value Added Times ¾ Location of Significant Waste


Why Value Stream Map?

¾ Systems Approach To:

¾ Visualize the Entire Product Flow ¾ Identifies the Sources of Waste ¾ Basis of an Lean Implementation Plan ¾ Determine Future Operating State


Product

Current-State Drawing

Future-State Drawing

Work Plan

Business Case Justification

Understanding how the product currently flows

Designing a lean flow

How to get there

Using the Value Stream Mapping Tool

Documents

Fundamentals of Leandspace.mit.edu/bitstream/handle/1721.1/35257/16... · @ 80% BTP zz Release months yy months 0 months Iterate Test System • Develo ment • Ver ifc at on •