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  1. MSE507Lean Manufacturing Chapter 5 Perfection

  2. The Incremental Path • Joe Day, the president of FNGP (Freudenberg-NOK General Partnership) of Plymouth, Michigan began to introduce Lean Thinking in 1992. • No matter how many times his employees improved a given activity to make it leaner, they could always find more ways to remove Muda by eliminating effort, time, space, and errors. • When FNGP reorganized its Ligonier, Indiana facility, an initial Kaizen event to achieved: • 56% increase in labor productivity • 13% reduction in factory space needed • In revisiting this activity in five additional three-day kaizen events over the next three years, there were: • 991% productivity boost • 48% reduction of space needed

  3. Repeat Kaizens – FNGP Ligonier, Indiana Factory, 1992-1994

  4. Kaikaku can describe radical non-recurring improvements or changes Sometimes called radical Kaizen “Kaikaku Teams” often take control of operations in crisis situation Repeated incremental improvement steps “Point Kaizen”or event driven improvements “Flow Kaizen” incorporates total operations in Lean Manufacturing (TPS) Kaizen vs. Kaikaku Radical Improvement Traditional Improvements

  5. Example - Kaizen and Kaikaku in Action

  6. What About the Cost?

  7. The Incremental Path • Improvements as seen in FNGP seem to defy all logic! • Kaizen activities are not free, and perfection- the complete elimination of muda – is surely impossible. So… • Should managers manage the steady state, keeping the “normal” performance? • Two common opinions of senior managers from around the world: • Steady state management – management of variances • Planning to do something, asking, “why did FNGP didn’t get the job done the first time instead of wasting three years before getting it “right”? • Both reactions show how traditional management fails to grasp the concept of perfection through Endless steps is the fundamental principle of lean thinking!

  8. The Radical Path • The alternative to incremental changes via kaizen events is a radical change in the path to perfection – kaikaku • A total value stream Kaikaku involves all the steps from start to finish. • Read example about glassmaking for the automotive industry • Chapter 5 pages 91-93

  9. Continuous Radical and Incremental Improvement • To pursue perfection, every organization needs to use both kaizen and kaikaku. • Every step in the value stream can be improved in isolation to good effect. If you are spending significant amounts of capital to improve specific activities, you are usually pursuing perfection the wrong way… • To effectively pursue both incremental and radical improvement, two final lean techniques are needed to be used by value stream managers: • Apply the four lean principles of: value specification, value identification, flow, and pull. • Decide which forms of muda to attack first (type one or type two)

  10. The Picture of Perfection • Managers have to learn to see: • See the value stream • See the flow of value • See value being pulled by the customer • The final form of seeing is to bring perfection into clear view so the objective of improvement is visible and real to the whole organization. • The example of glassmaking demonstrates a radical rethink of the whole value stream so that value-creating steps are conducted immediately next to the customer exactly when needed. • Toyota certainly had a picture of perfection derived from its mastery of lean principles: • Japanese service parts business in 1982 • Same concepts in North America in 1989

  11. The Picture of Perfection • No picture of perfection can be perfect… • As changes and improvements are being made to a value stream, the picture of perfection is changing… However, the effort to envision the picture of perfection provides inspiration and direction essential to making progress along the path… • One of the most important things to envision is the type of product designs and operating technologies needed to take the next steps along the path to excellence. • The knowledge that products must be manufactured more flexibly in smaller volumes in continuous flow provides guidance to technologies in the functions developing generic designs and tools.

  12. Focusing Energy to Banish Muda • Organizations which never started down the path of continuous improvement because of lack of vision obviously failed. • Sadly, other firms set off full of vision, energy, and high hopes, but make very little progress due to lack of direction and resources along the path. • What’s needed instead is to form a vision, select the two or three most important steps to set you there, and defer to other steps until later. • Policy deployment is the last lean technique needed to be done by top management agreement on: • Few simple goals for transitioning from mass to lean • Few projects to achieve these goals • Designate people and resources for getting the projects done • Establish numerical improvement targets to be achieved by a given point in time.

  13. Focusing Energy to Banish Muda • If a firm adopt a goal of converting the entire organization to continuous flow with all internal order management by means of a pull system, the projects required to do this might include: • Reorganizing the product families such that product teams take many on many of the jobs of traditional functions • Creating a “lean function” to assemble the expertise to assist the product teams in the conversion • Commencing a systematic set of improvement activities to convert batches and rework into continuous flow. • Numerical improvement goals and timeframes may be: • Convert into production teams within 6 months • Conduct improvement activities on six major activities per month • Reduce on hand inventory by 25% in the first year • Reduce number of defects by 50% in the first year

  14. Example – Eaton Aerospace Goal Card

  15. Smashing Inertia to Get Started • We now reviewed the basic lean principles, the five powerful ideas in the lean tool kit needed to convert firms and value streams from areas full of MUDA to fast-flowing value, defined and then pulled by the customer. • The techniques themselves and the philosophy are open for everyone to know. • Transparency in everything is a key principle. • Policy deployment operates as an open process to align people and resources with improvement tasks. • Massive and continuing amounts of problem solving are conducted by teams of employees who historically have not even talked to each other, much less treated each other as equals. • Yet the catalytic force moving firms from batch-and-queue into value streams is generally an outsider – the change agent.

  16. Homework Assignment • Questions: • Describe the five steps of Lean Thinking. How are they being deployed to achieve continuous improvement? • You are documenting a Current State Value Stream Map for a business for the first time • Which types of waste are likely to be present? • Which will be the top three types of waste that you are likely to be first address? Explain your selection • Read Learning to See Parts I, II and III • Start to Page 1-56

  17. Homework • Describe the five steps of Lean Thinking. How are they being deployed to achieve continuous improvement? • You are evaluating a Current State Value Stream Map that was done for the first time. • Which types of waste are likely to be present? • Rank the top three types of waste that are likely to be first to be addressed and which would be last, and explain why you think they will be in that order.

  18. Questions? Comments?