Implementing Lean Manufacturing Through Factory Design

Implementing Lean Manufacturing Through Factory DesignBy Jamie W. FlinchbaughB.S. Mechanical Engineering, Lehigh University, 1994M.S. Mechanical Engineering, University of Michigan, 1996Submitted to the Sloan School of Management and theDepartment of Mechanical Engineeringin Partial Fulfillment of the Requirements for the Degrees ofMaster of Science in ManagementandMaster of Science in Mechanical Engineeringat theMassachusetts Institute of TechnologyMay 1998 1998 Massachusetts Institute of Technology.Signature of AuthorSloan School of ManagementDepartment of Mechanical EngineeringCertified byDavid E. Hardt, Thesis SupervisorProfessor, Department of Mechanical EngineeringCertified byJanice Klein, Thesis SupervisorSenior Lecturer, Sloan School of ManagementAccepted byAnthony T. Patera, Chairman of the Graduate CommitteeDepartment of Mechanical EngineeringAccepted byLawrence S. Abeln, Director of Master’s ProgramSloan School of Management

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Implementing Lean Manufacturing Through Factory DesignBy Jamie W. FlinchbaughAbstractFactory design can play an important role in the diffusion of new technologies formanufacturing. Historically, factory design impeded the electrification of factoriesbecause there were significant interrelationships between the factory infrastructure andelectric manufacturing processes. These interrelationships could not be fully leveragedpartly because huge investments were tied up in the old factories but more importantly ittook a long time for people to understand all of the interrelationships that constituted anentirely new technological system. I explore in this thesis that the diffusion of leanmanufacturing suffers the same fate as factory electrification, and therefore exploring theinterrelationships that make up lean manufacturing systems, including factories, will helpextend the adoption of lean manufacturing in U.S. factories.I explore the relationships between factory design and lean manufacturing throughtwo tools, axiomatic design and a queueing model. Axiomatic design is a process thathelps the user derive the physical design parameters of the factory from the systems andfunctional requirements. The process helps draw out the explicit understanding offactory design and lean manufacturing and make it explicit. Axiomatic design helped meexplore the essence of a lean factory, which can be summarized by the followingfeatures: independent departments through buffers and management structures,decentralized support activities to support problem solving and continuous improvementactivities, and modular and scalable factory features which allow ease in continuousimprovement in factory layout.I used the queueing model to explore the relationships between the various designparameters of the lean factory and throughput performance. Throughput can be improvedby shortening line segments, increasing the quantity and size of accumulation buffers,designing over-speed into upstream line segments, and allowing time to reset buffers witha two-shift policy. All of these parameters cost investment dollars and should be usedonly in moderation. The model also explored variation reduction through thedevelopment of a strong set of problem solving skills. Variation reduction provided thesame benefit as other parameters, but required no investment costs, and is therefore asuperior leverage parameter.Finally, I explore the issue of launching the new lean factory. I discuss the risksinvolved in launching a lean factory, and potential mechanisms to balance the need oflearning with the need for efficient production. A well-developed training plan, on-linecoaching and launching organizational changes before launch can all help alleviate therisks. The issue of implementing the factory is as critical as designing the factory.Thesis Advisors:Jan Klein, Senior Lecturer, Sloan School of ManagementDave Hardt, Professor, Department of Mechanical EngineeringPage 2

AcknowledgementsI wish to acknowledge the support of the Leaders for Manufacturing Program, apartnership between MIT and major U.S. manufacturing companies, under whosesponsorship this research was done.I wish to thank Chrysler Corporation and Chrysler Manufacturing in several ways.First, Chrysler Manufacturing is dedicated to learning and improvement, and in that spiritthey sponsored me in my improvement in the Leaders for Manufacturing Program. Iwish to thank the project team that I worked with on my internship for their openness andwillingness to learn, particularly my supervisor, Helen Lau. I also wish to thank all ofthose individuals at Chrysler who inspired, coached, and guided me. Without all of you Iwould never have made it as far as I have.I wish to thank those from MIT who provided help along the way. I thank mythesis advisors Jan Klein and Dave Hardt in their guidance and collaboration in designingmy internship experience. I want to thank Steve Graves and Sean Willems for theircollaboration in exploring modeling with me. I want to thank the many faculty memberswho were willing to explore questions and share their work along the way. Finally, Ithank the LFM Class of 1998 for their friendships, experience, and spirit of mutuallearning. You made this experience worthwhile.I wish to thank all of you who have helping, inspired, and taught me along theway. There are too many to name, but none of you did what you did for recognition, butinstead out of caring and giving.I wish to thank my parents in York for raising me the in the way that they did, andmy parents in Chicago for caring for me and accepting me into their family.I thank my beautiful wife Jill Triani. I dedicate this work to you, because I do nothave the words to express my love, respect, and gratitude for what you bring to me and tolife.Page 3

“There is a joy in manufacturing onlypoets are supposed to know.”-Chrysler Corporation founder Walter P. ChryslerPage 4

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Table of ContentsABSTRACT . 2ACKNOWLEDGEMENTS . 3TABLE OF CONTENTS. 6CHAPTER 1: INTRODUCTION AND OVERVIEW . 12FACTORY DESIGN AND TECHNOLOGY DIFFUSION . 12The Electric Dynamo . 13SYSTEMS THEORY AND MANUFACTURING . 15Why systems solutions?. 15Quality is Free. 16Systems theory and manufacturing . 17Review of manufacturing strategy theory. 17CHAPTER SUMMARY . 19CHAPTER 2: LEAN MANUFACTURING AT CHRYSLER. 20CHRYSLER’S CORPORATE MISSION . 20THE CHRYSLER OPERATING SYSTEM . 21How COS was started . 21Balanced improvement in SQDCM. 21Everyone is becoming lean. 22How COS is implemented . 23CHRYSLER OPERATING SYSTEM SUB-SYSTEMS . 25Human Infrastructure . 25Leveled and Balanced Schedules. 25Value-Added Activities. 27Robust, Capable, and In-Control Processes . 27Page 6

PROGRESS OF AND RESISTANCE TO COS WITHIN THE PLANTS. 29CHAPTER SUMMARY . 30CHAPTER 3: DIFFUSING KNOWLEDGE INTO DECISION-MAKING. 31HOW ADVANCE MANUFACTURING ENGINEERING IMPACTS COS . 31Advance Manufacturing as a subsystem . 31Roles and responsibilities . 32DEVELOPING AN IDEAL STATE PROCESS . 33DEALING WITH CONSTRAINTS . 35Balancing learning and action with limited time. 35A robust design process for products and processes . 36INTERRELATIONSHIPS BETWEEN PRODUCT AND PROCESS . 38Complexity and definitions. 38Complexity and product quality . 39CHAPTER SUMMARY . 42CHAPTER 4: AXIOMATIC DESIGN OF THE FACTORY. 44A REVIEW OF AXIOMATIC DESIGN FOR THE FACTORY . 44Creating explicit knowledge from tacit knowledge. 46The design of a factory architecture . 46An example: A COS-driven factory . 47AXIOMATIC DESIGN: DETAILED VERSION . 48CHAPTER SUMMARY . 53CHAPTER 5: THE ESSENCE OF THE DESIGN . 54INDEPENDENCE BETWEEN DEPARTMENTS . 54DECENTRALIZED SUPPORT ACTIVITIES . 55MODULARITY, SCALABILITY, AND INTERCHANGEABILITY . 56CHAPTER SUMMARY . 56Page 7

CHAPTER 6: MODELING THE FACTORY. 57Why model the design? . 57MODELING ANDON AND AUTONOMY . 57Relating the design parameters to throughput . 59THE DEVELOPMENT OF A QUEUEING MODEL . 62Understanding trade-offs . 62The development of the queueing model . 63Does Toyota use a model? . 68INSIGHTS GAINED FROM THE MODEL . 69Buffer Size and Line Segment Length . 69Line over-speed . 72Variation reduction . 73Shift policy . 75Solution convergence. 76CHAPTER SUMMARY . 77CHAPTER 7: MOVING FROM DESIGN TO PRODUCTION . 78UTILIZING WHAT WAS LEARNED TO DESIGN A COMPLETE FACILITY . 78WHY IMPLEMENTATION IS NOT TRIVIAL . 81The hand-off to plant management .

I wish to acknowledge the support of the Leaders for Manufacturing Program, a partnership between MIT and major U.S. manufacturing companies, under whose sponsorship this research was done. I wish to thank Chrysler Corporation and Chrysler Manufacturing in several ways. First, Chrysler Manufacturing is dedicated to learning and improvement, and in that spirit they sponsored me in my .