Lean in process industry environments

Wiebe Nijdam

March 29th,

Hørsholm Denmark

Introduction: Lean Global Network

� LGN is a non-profit corporation with HQ in Boston, USA and consists of 17 affiliated

non profit Lean Institutes devoted to the promotion of lean and the development of

lean leaders.

� Global Mission: ‘to be the leading educators for society in maximizing value and

minimizing waste. To accomplish this goal, we develop, advance and implement lean

principles, tools, and techniques as a system designed to enable positive change’.

� Affiliates support lean transformations by developing lean practitioners and leaders

through education, coaching, support, action research, events and learning materials.

� Founded in 1997 by Jim Womack & Dan Jones – authors of ‘The Machine that Changed

the World’, ‘Lean Thinking’ and ‘Lean Solutions’.

Introduction: Wiebe Nijdam

�Managing Partner Lean Management Institute

Netherlands

�Actively involved in Lean since 2001 (food &

process industry, retail & logistics, heavy

equipment, clothing industry)

� Lean experience in over 60 projects worldwide

� Background: plant manager, education &

consulting

Overview

� Introduction

� The two different types of production industry

�Always the process focus!

� Case

�How do lean transformations work?

�Where & how to start?

�Questions

Does Lean work in process

environments?

�Yes it does!

�Let’s see how…..

Assembly

characteristic

A few variants

Many parts

become, …..

Process Industry

characteristic

A few raw

materials

become, …..

Many variants

Most of

you, are in

this area:

Typical problems in process industry

� Fast processes, can create big volumes very quickly but can create also

waste very quickly

� Difficult changeovers, big volumes and batch sizes, long start-up times.

� Losses of material at changeovers

� Often more remote from the customer, full bullwhip effect

� Basic stability problems, sometimes vulnerable, complicated processes and

machinery

� Perception that raw material is cheap, thus limited focus on losses.

What does this cause?

For example:� Rework (although it is sometimes

automated and not seen as rework

anymore)

� Lost time as result of standstill (time

is the only asset that is not

replaceable)

� Loss of finished goods as result of:

• Off specifications (material

instability)

• Machine instability (spillages, start-

up losses, tank-heels)

• Wrong settings (method instability)

Results in

�Quality concerns

� Late delivery

� Costs issues,

margin under

pressure

Request of new product

A business process:

Raw Material Finished Product

Process Process Process

New productdevelopment

New product launched

Process

Pilot / trial run at manufacturing

Order Entry Production Distribution

Process Process Process

Process: all steps necessary to turn a raw material into a finished product

Concept

Lean

Value added vs. non value added

Necessary but non value adding

Value adding

Non value adding

11

“All we are doing is looking at the time line - from

the moment the customer gives us an order to the

point where we collect the cash. And we are

reducing that time line by removing the non-value-

added wastes” Ohno (1988-ix)

Focus of Lean

Focus of traditional efficiency improvement

20%

19%

29%

2%

7%6%

0% 3%1%

2%

7%

2% 1%1%

Milk

Raws

Packs

Labour

Depretiation

others

losses

other vardistrib

You are not getting a big gain by

reducing on walking distance……….

� Classical perception of lean,

reduction of the 7 wastes:

• Transport

• Inventory

• Motion

• Waiting

• Overproduction

• Over processing

• Defects

Where to start? Connect with your P&L!

Sales Increase revenues by offering products customers want

through constantly testing customer preferences (what

makes customers smile?), improving quality and

frequently renewing products

Cash Improve cash by mastering, simplifying and accelerating

flows and reducing inventory

EBIT Improve profitability by understanding the true source

of costs in seeing the waste created by our work

methods and teaching employees to eliminate it step by

step

Capital Expenditure Developing lighter, more flexible equipment that keep

people in control of the process while liberating them

from heavy burdens

Source: Michael Ballé, writer of “the

Goldmine” & “The Lean Manager”

Phases in a lean transformationIm

pro

ve

me

nt

Time

Work on improvemts in

the total supply chain

Realize process changes in your

“door to door “process

Create stability in your process

Where & how can you start?

� Understand how you are doing:

Indicator Y-1 J F M A M J J A S O N D BETTER SAME WORSE

Accidents

On-time Delivery

Customer complaints

Internal Not Right First Time

Suggestions

Absenteism

Production Per Hour Per Person

OEE

Days of Inventory

Finished Goods

WIP

If you know how you are doing, which

challenges are you facing?

Equipment & Method

• Quality

• Planning

• Utilization of machinery

• Sustainable position

• Responsiveness to the market

Men

� CI culture

� Leadership

� Ownership, engagement

• The wastes you see in a process are symptoms, look for the causes that

create them!

• Do not only focus on machines, a process is always the result of people

actions

• Where is your organisation currently in development? Take the actions that

fit to your current status.

Questions?

Contact:

� Wiebe Nijdam

• Nijdam@leaninstituut.nl

• +31 6 26458256

� René Aernoudts

• Aernoudts@leaninstituut.nl

• +31 6 50206438

� www.leaninstituut.nl