Lean Vs Pretend Lean - WordPress
Real Lean vs Pretend LeanWhat’s the Difference?Roger OlsonJanuary 10, 2006SYSTEMS Quality Consulting1
Agenda History of Real Lean What is “Real Lean” Where does pretend lean come from? (CaseStudies) Signs you are doing “pretend lean”SYSTEMS Quality Consulting2
Where Did Lean Come From?A Brief History of LeanSYSTEMS Quality Consulting3
ManageInventory!Originsof LeanManageYour Time!Benjamin FranklinSYSTEMS Quality Consulting4
Benjamin FranklinInfluencesHenry FordSYSTEMS Quality ConsultingOriginsof LeanShorten the production cycleEliminate/manage wasteLearn from problemsValue your customersValue your employees5
Benjamin FranklinInfluencesHenry FordDemingOriginsof LeanJuranPost WWII Occupation ofJapan (Gen Macarthur) Training Within Industry Management TrainingProgramInfluencesToyotaTaichi Ohno,Toyota’s Chief EngineerSYSTEMS Quality Consulting6
U.S. Occupation Training forJapanese CompaniesTraining Within Industry (for lower management) Standard work Educate workers to solve their own problems Rapid Process Improvement (kaizen) Training on a just-in-time basisManagement Training Program (for middlemanagement) Statistical process control Continuous process improvementThese programs continue in existence in Japan today!SYSTEMS Quality Consulting7
What is “Real” Lean?SYSTEMS Quality Consulting8
Best Quality-Lowest Cost-Shortest Lead Timethrough continually shortening the production flow by eliminating wasteSYSTEMS Quality Consulting9
Best Quality-Lowest Cost-Shortest Lead Timethrough continually shortening the production flow by eliminating wasteJust-in-time Right part,Right amountRight timeTakt time planningContinuous flowPull SystemQuick changeoverIntegrated logisticsJidokaPeople and Teamwork Selection Ringi decision Commongoalsmaking Cross-trainedContinuous ImprovementWaste Reduction Genchi Eyes for WasteGenbutsu Problem 5-Why’s Solving(In-station quality)Make problems visible Automatic stops Andon Person-machineseparation Error proofing In-station qualitycontrol Solve root cause ofproblems (5-Why’s)Leveled Production (heijunka)Visual ManagementStable and Standardized ProcessesToyota Way PhilosophySYSTEMS Quality Consulting10
Best Quality-Lowest Cost-Shortest Lead Timethrough continually shortening the production flow by eliminating wasteJust-in-time Right part,Right amountRight timeTakt time planningContinuous flowPull SystemQuick changeoverIntegrated logisticsJidokaPeople and Teamwork Selection Ringi decision Commongoalsmaking Cross-trainedContinuous ImprovementWaste Reduction Genchi Eyes for WasteGenbutsu Problem 5-Why’s Solving(In-station quality)Make problems visible Automatic stops Andon Person-machineseparation Error proofing In-station qualitycontrol Solve root cause ofproblems (5-Why’s)Leveled Production (heijunka)Visual ManagementStable and Standardized ProcessesToyota Way PhilosophySYSTEMS Quality Consulting11
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Best Quality-Lowest Cost-Shortest Lead Timethrough continually shortening the production flow by eliminating wasteJust-in-time Right part,Right amountRight timeTakt time planningContinuous flowPull SystemQuick changeoverIntegrated logisticsJidokaPeople and Teamwork Selection Ringi decision Commongoalsmaking Cross-trainedContinuous ImprovementWaste Reduction Genchi Eyes for WasteGenbutsu Problem 5-Why’s Solving(In-station quality)Make problems visible Automatic stops Andon Person-machineseparation Error proofing In-station qualitycontrol Solve root cause ofproblems (5-Why’s)Leveled Production (heijunka)Visual ManagementStable and Standardized ProcessesToyota Way PhilosophySYSTEMS Quality Consulting13
Best Quality-Lowest Cost-Shortest Lead Timethrough continually shortening the production flow by eliminating wasteJust-in-time Right part,Right amountRight timeTakt time planningContinuous flowPull SystemQuick changeoverIntegrated logisticsJidokaPeople and Teamwork Selection Ringi decision Commongoalsmaking Cross-trainedContinuous ImprovementWaste Reduction Genchi Eyes for WasteGenbutsu Problem 5-Why’s Solving(In-station quality)Make problems visible Automatic stops Andon Person-machineseparation Error proofing In-station qualitycontrol Solve root cause ofproblems (5-Why’s)Leveled Production (heijunka)Visual ManagementStable and Standardized ProcessesToyota Way PhilosophySYSTEMS Quality Consulting14
Best Quality-Lowest Cost-Shortest Lead Timethrough continually shortening the production flow by eliminating wasteJust-in-time Right part,Right amountRight timeTakt time planningContinuous flowPull SystemQuick changeoverIntegrated logisticsJidokaPeople and Teamwork Selection Ringi decision Commongoalsmaking Cross-trainedContinuous ImprovementWaste Reduction Genchi Eyes for WasteGenbutsu Problem 5-Why’s Solving(In-station quality)Make problems visible Automatic stops Andon Person-machineseparation Error proofing In-station qualitycontrol Solve root cause ofproblems (5-Why’s)Leveled Production (heijunka)Visual ManagementStable and Standardized ProcessesToyota Way PhilosophySYSTEMS Quality Consulting15
Best Quality-Lowest Cost-Shortest Lead Timethrough continually shortening the production flow by eliminating wasteJust-in-time Right part,Right amountRight timeTakt time planningContinuous flowPull SystemQuick changeoverIntegrated logisticsJidokaPeople and Teamwork Selection Ringi decision Commongoalsmaking Cross-trainedContinuous ImprovementWaste Reduction Genchi Eyes for WasteGenbutsu Problem 5-Why’s Solving(In-station quality)Make problems visible Automatic stops Andon Person-machineseparation Error proofing In-station qualitycontrol Solve root cause ofproblems (5-Why’s)Leveled Production (heijunka)Visual ManagementStable and Standardized ProcessesToyota Way PhilosophySYSTEMS Quality Consulting16
gyPhilosopolohnTecLean PrinciplesSeven WastesValue vs nonvalue addedhyThe Lean TriangleCultureValue stream mapsJust In TimeTakt TimeFlowKanban SystemsVisual ManagementMistake proofingStandard workTPMKaizens, etc.Competent, flexible, highly motivated employees operatingin an environment of enlightened experimentation.SYSTEMS Quality Consulting17
Pretend LeanJust In TimeolohnTecFlowKanban SystemsVisual ManagementgyStandard workKaizensSYSTEMS Quality Consulting18
The Five Lean PrinciplesJames Womack & Daniel Jones Definitionbased on the IMVP study of Toyota Precisely specify value by specific product. Identify the value stream for each product. Make value flow without interruptions. Let the customer pull value from the producer. Pursue perfection.SYSTEMS Quality Consulting19
1. Precisely specify value by specific productValue Specify value from the standpoint ofthe end customer Value is increasingly a solution to thecustomer’s problem -- e.g., a leak free drivetrain rather than an isolated gasket What is the customer willing to pay for?¾ This changes over time! Let the customer define valueSYSTEMS Quality Consulting20
2. Identify the value stream for each productValue Stream Mapping Identify all of the steps currently requiredto create value. (current state map) Decide what the future should look like.Challenge every step: Why is this necessary?(future state map) Many steps are only necessary because of the wayfirms are organised and previous decisions abouttechnology. (NOT because the customer wants it)SYSTEMS Quality Consulting21
Value Stream Map - Current StateProductionControl6 WEEKForecastyeklWe axFSuppliersCustomerMRPOrder EntryDemand 100 per day1 shiftTakt Time 4.5 minutesLead Time - 34 DaysWEEKLY SCHEDULECompetitive Lead Time 5 Days1XWeeklyICoils5 daysStampingOp #10CT 1secCo 1 hr.Uptime 85%1 shift5 daysStampingOp #20IICT 1 secCo 90 min.Uptime 70%1 shift4.6 days1 sec Quality Consulting1 secSYSTEMSStampingOp #30ICT 1 secCo 90 min.Uptime 80%1 shift1.8 daysLatheOp #40IICT 45 secCo 45 minCT 4 minCo 0FTY 67%1 shiftUptime 100%2 shifts2.7 days1 secShipping3.5 days45 secLead Time 12.6 daysValue AddTime 48 secs22
Value Stream Map - Current StateProductionControl6 WEEKForecastyeklWe axFSuppliersCustomerMRPOrder EntryDemand 100 per day1 shiftTakt Time 4.5 minutesLead Time - 34 DaysWEEKLY SCHEDULECompetitive Lead Time 5 Days1XWeeklyICoils5 daysStampingOp #10CT 1secCo 1 hr.Uptime 85%1 shift5 daysStampingOp #20IICT 1 secCo 90 min.Uptime 70%1 shift4.6 days1 sec Quality Consulting1 secSYSTEMSStampingOp #30ICT 1 secCo 90 min.Uptime 80%1 shift1.8 daysLatheOp #40IICT 45 secCo 45 minCT 4 minCo 0FTY 67%1 shiftUptime 100%2 shifts2.7 days1 secShipping3.5 days45 secLead Time 12.6 daysValue AddTime 48 secs23
The ParadoxValue stream mapping is the bestway to identify where the highpayoff opportunities are, yet valuestream mapping is the lean toolmost likely to not be used bycompanies doing pretend lean!SYSTEMS Quality Consulting24
3. Make value flow without interruptionsFlow Line up all of the steps that truly create value sothey occur in a rapid sequence Requires that every step in the process be: Capable – right every time. Available – always able to run Adequate – with capacity to avoid bottlenecks Accomplished by removing the barriers to flow ALL of the barriers to flow are creating waste!SYSTEMS Quality Consulting25
4. Let the customer pull value from the producerPull Through lead time compression and correct valuespecification let the customer get exactly what’swanted, exactly when it’s wanted, in the exactnumber wanted: Make to order with rapid response time internally. Don’t make it until the customer orders it Extend the pull process externally.SYSTEMS Quality Consulting26
Pull Vs PushProduce only what the customer demandsPull is driven by the customerPush is driven by company (creates waste)JOBBJOJOBBJOB JOB JOPUSHJOBJOBSYSTEMS Quality ConsultingJOBPULL27
5. Pursue perfection Create a clear vision of perfection (the futurestate map)– Constantly work on shortening production cycle– Production ideals (quality and quantity)– Focus on what the customer values Make waste visible and evident– Get all employees involved Problem solving Process improvement (Six Sigma)SYSTEMS Quality Consulting28
Toyoda on WasteWaste is “anything other thanthe minimum amount ofequipment, materials, parts,space, and worker’s time, whichare absolutely essential to addvalue to the product.”— Shoichiro ToyodaEx-President, Toyota 1995 Corel Corp.SYSTEMS Quality Consulting29
Lean Enterprise: a business organizationthat delivers value to its stakeholders,with little or no superfluous consumptionof resources (materials, human, capital,time, equipment, information, energy,etc) by minimizing non-value addingactivities.SYSTEMS Quality Consulting30
What is Waste?An activity or output that adds cost but does not add valueas perceived by the end-use customer.If you could explain to your customer what every step ofyour operation cost, are there any steps your customer wouldnot be willing to pay for? scrap rework looking for: parts, tools, material, people, etc. rescheduling expedited shipments ?SYSTEMS Quality Consulting31
Value vs. Non-Value Adding ActivitiesValue: When a product or service has been perceived orappraised to fulfill a need or desire as defined by thecustomer—the product or service may be said to have valueor worth.Value-Adding: The creation of value through waste-freeoperations and processes. Any operation or activity thatchanges, converts, or transforms material or information intoa product or service the customer is willing to pay for.Non-Value-Adding: Any operation or activity that takestime and resources but does not add value to the product orservice sold to the customer ( Waste)SYSTEMS Quality Consulting32
Delivery of “Value” to Your entNVAMajorImprovementNVALEAD TIMEThe value adding parts of the process are obvious, so companiesmistakenly focus on trying to make them go faster. The waste is notobvious, so it is not addressed. Lean focuses on eliminating the waste.SYSTEMS Quality Consulting33
The Seven Types of ionInappropriate ProcessingUnnecessary InventoryDelays/WaitingUnnecessary MotionsSYSTEMS Quality Consulting34
Where Does “Pretend”Lean Come From?Case StudiesSYSTEMS Quality Consulting35
Company “P” 400 employeesHigh volume (300,000/day), low cost products1999, profit of 1.2MM on 42MM (2.8%)New parent company is not happy, demandsaction! Suggests looking into Lean. Solution: Company “P” hires consultants to doLean for themSYSTEMS Quality Consulting36
Company “P” 1999: low profits ( 1.2MM) 2000: spend 550K on consultants over 6months (3 consultants onsite for 6 months) End of 2000: profits up to 1.8MM ( ) End of 2001: profits of 2.8MM ( ) End of 2002: profits of 3.0MM ( ) End of 2003: profits of 2.4MM ( ) End of 2004: profits of 1.8MM ( )SYSTEMS Quality Consulting37
Company “P”Parent Company is not happy any more!What went wrong? Consultants did it all No training, no understanding of value vs.non-value added activities No transfer of “Why things have beenchanged”March 2005 Company “P” was closed down byparent companySYSTEMS Quality Consulting38
Company “D” 80 employeesLow volume (30-40/day), expensive productsCompany making OK profits2001, major customer wants to train Company“D” on “Lean” so customer can get JIT deliveries,Customer provides 40 hours of “Lean” training,requires a Lean project Results?SYSTEMS Quality Consulting39
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Company “D” In 2003 largest customer wants Company“D” to participate in their Lean trainingprogram– Needed lead time improvement (wanted at least50% reduction in lead time)– Wanted to set up Kanban arrangement fordeliveriesSYSTEMS Quality Consulting41
Company “D”Company “D’s” response? “We Have Done Lean” “We sat through 40 hours of their class” “We made that shadow box thing” “We did Lean, it didn’t help, and we don’t needany more help!” (Their lead time was 28 weeks for a product with2 parts to it, and a value-adding time of 25 hours)SYSTEMS Quality Consulting42
Company “D” In early 2005, their largest customer (was 30% of sales) found another supplier whocould deliver in 12 weeks instead of 28 Company “D” laid off 20 employees by endof 2005 A quote from owner of Company “D”:“Lean Manufacturing did nothing for us, wedon’t recommend it”,SYSTEMS Quality Consulting43
Company “D”What went wrong? Their training focused only on a few tools Their training never mentioned “waste”,value vs non-value adding activities Their training failed to mention that Lean isongoing, there is no end to the search forwaste! Their training involved three out of 80employees, and it never went beyond thatSYSTEMS Quality Consulting44
Company “C” 180 employees Moderate volume (400/day), moderate price( 300- 500/each) products Lead time in 2001 was 8 weeks, Largest customer came in and value-streammapped for them, determined value addingtime to be 8 days, and then demandedserious improvement in lead timeSYSTEMS Quality Consulting45
Company “C”Solution: Hire someone from a companydoing lean!Results: Some 5S activities (more like 2S though) Some visual management Several low yield Kaizen events Lead time reduced by 3 days at end of ayear (37 working days, down from 40)SYSTEMS Quality Consulting46
Company “C”Early 2003, the largest customer asked ownerof Company “C”, when are you going tostart working on reducing lead time?”Owner decided Lean was not the answer toreducing lead time and that he needed toinvest in automationBy end of 2005, after spending over 1.5MMon automation, lead time had gone from 7.2weeks, to 9.1 weeks! (Any guesses why?)SYSTEMS Quality Consulting47
Company “C”What went wrong? Lean was a one-man show Focus was on tools only No concept of a transformation No focus on eliminating waste No understanding of value vs non-valueadding activitiesSYSTEMS Quality Consulting48
An Observation Companies “P”, “D” and “C” all thoughtthey had done Lean Companies “P” thought Lean was great fora few years, then wondered “Where did theLean go?” Companies “D” and “C” thought they didLean, and that it was a waste of time.SYSTEMS Quality Consulting49
Where Does Pretend LeanCome From? Consultants (Company “P”) “Well Intentioned” customers (Company “D”) Employees hired because they workedsomewhere that was doing “lean” (Company “C”)(Management seeking a “magic bullet”)SYSTEMS Quality Consulting50
Signs You’re Doing Pretend Lean Won’t call “waste” “waste” (hurts people’sfeelings!) Focus just on a couple of Lean tools Ignoring the value stream “Drive-By” Kaizen Events No change in culture Just a few people involvedSYSTEMS Quality Consulting51
Signs You’re Doing Pretend Lean Little or no management support/involvement No pain or frustration (transforming to Leanis hard, painful work) Not setting goals for reducing lead time andworking towards them Not setting goals for reducing non-valueadding times and working towards themSYSTEMS Quality Consulting52
The Doom LoopNew Direction, ProgramLeader, Fad, etc.No Buildup,No Momentum,Poor ImplementationReaction, WithoutUnderstandingDisappointingResultsSource: Good to Great, Jim CollinsSYSTEMS Quality Consulting53
Real LeanFocus on product value - a keen focus onproduct value to the consumer and identifyingvalue added activities thereby exposing nonvalue added activitiesElimination of waste - activities that utilizeresources but do not create value must beeliminated. This is an ongoing hunt! Ideallyit will involve all employees.SYSTEMS Quality Consulting54
Real LeanDriven By Customer Needs - all activitiesare driven by customer needs withoutartificial boundaries such as minimum reorder points, quality control checks, clericaldata entry, management approvalprocedures and “meeting the monthlynumbers.”SYSTEMS Quality Consulting55
Real LeanContinuous Improvement And Standardization ongoing tenacity towards perfection andelimination of process variation in all aspects ofthe company utilizing such tools as Six Sigma,Kaizen, Poka-Yoke, etc.Culture Of Change - the development of a culturewhich embraces continuous change with “can do”attitudes is the most important aspect of the LeanEnvironmentSYSTEMS Quality Consulting56
Real LeanA lean environment is not an inventorycontrol methodology or a specialmanufacturing method - it is a culture thatembraces the above five attributes that mustbe used in the office as well as the shopfloor.SYSTEMS Quality Consulting57
Real Lean Is not a project Transforms how the company operates andhow employees think about their work Constantly looking for, and eliminatingwaste Has no end (there is no “done”) Will last, pretend lean will not.SYSTEMS Quality Consulting58
Some Final ThoughtsToyota in 2004 had more money in the bankthan G.M., Ford, Daimler/Chrysler and VWcombined.Toyota in 2004 made more profits than G.M.,Ford, Daimler/Chrysler and VW combined.Toyota has been working on eliminatingwaste for 50 years.They believe they still have a ways to go!SYSTEMS Quality Consulting59
QuestionsSYSTEMS Quality Consulting60
SYSTEMS Quality ConsultingPO Box 565, Alta Loma CA 91701Toll Free: 888-734-3447www.systemsquality.comTraining and Consulting inLean Manufacturing, Six SigmaISO 9001, ISO 14001SYSTEMS Quality Consulting61
The Lean Triangle Lean Principles Seven Wastes Value vs non value added Value stream maps Just In Time Takt Time Flow Kanban Systems Visual Management Mistake proofing Standard work TPM Kaizens, etc. Competent, flexible, highly motivated employees operating in an environment of enlightened experimentation.
Lean Six Sigma Yellow Belt provides a detailed information on the Lean Six Sigma fundamentals and ways to apply Lean Six Sigma to specific industry to achieve desired results. LEAN MANAGEMENT 1.0 Introduction to Lean 2.0 What is Lean & Application of Lean
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1550-1950, which she curated with Anne Sutherland Harris for the Los Angeles County Museum of Art; the show was accompanied by the catalogue of the same title co-authored by both scholars. Linda Nochlin has written numerous books and articles focusing attention on social and political issues revealed in the work of artists, both male and female, from the modernist period to the present day .
