Demand Chain Solutions Set-Up Reduction

1. Demand Chain SolutionsSet-Up Reduction Jason Fretz Brian Grannan Aaron Lininger Jeff Lovell

2. Set-Up Reduction-Seminar Expectations & Outcomes Part I • What Set-up Reduction is and why it is important to achieving Lean processes and World-Class Performance results. Part II • Factors that Influence Lead Times and Set-up Operations. • The basic concepts and steps required to effectively implement a Set-up Reduction Program. Part III • How to Properly Analyze any set-up operation through a proven, step-by-step process using low-cost solutions and techniques. • How to develop effective performance measures to insure you are obtaining the results necessary from the program.

3. Set-Up Reduction Part I • Define Set-up. - In your own words write a definition of set-up.

4. Set-Up Reduction Definition we will use in this training session to define set-up - The elapsed time from when the last part of the current run is completed until the work center starts running the first good piece of the next run.

5. Set-Up Reduction • Steps in the Set-Up Process- (1) Preparation Step. Work that is done to prepare for set-up or changeover- i.e.: finding materials, jigs, gauges, etc. Makes up approximately 30% of the set-up process time.

6. Set-Up Reduction • Steps in the Set-Up Process- (continued)- (2) Mounting and Dismounting Step. This involves work for taking cutter heads, blades, and other similar tooling off the equipment and putting on the new required tooling. Makes up approximately 5% of the set-up process time.

7. Set-Up Reduction • Steps in the Set-Up Process- (Continued)- (3) Centering, dimensioning and setting step. Involves fine-tuning the tooling and equipment to run the next part. Takes approximately 15% of the set-up process time.

8. Set-Up Reduction • Steps in the Set-Up Process- (Continued)- (4)Trial Runs and Adjustments. Involves the frequent trial-and-error approach to set up the tooling and equipment to run the parts according to specifications. - Makes up the largest single time element in most set-up- approximately 50% of the set-up process time. - This is where initial efforts can reap large benefits in reducing set-up times.

9. Set-Up Reduction • What is Set-up Reduction? - A process through which the total time required to changeover or set-up equipment or a work center is dramatically reduced through a systematic, problem-solving, waste-eliminating approach to support the movement toward small lot size runs. This will reduce inventory and increase productive run time to achieve increase in throughput, minimizing lot sizes, and reducing total costs.

10. Set-Up Reduction • Traditionally, we have left set-up operations to the workers. Even when employees are conscientious, they often lack the resources and authority to make significant improvements to the set-up process. • Outdated accounting practices still “drive” many organization’s thoughts regarding set-up. That is- large lot size runs in order to spread the cost of timely and costly set-up operations across many pieces, thereby reducing set-up cost per piece. • What this model of thinking results in is lengthy set-up operations that take hours or days, instead of minutes. Most set-ups can be reduced by 50-90% with a focused approach, using low-cost, no cost techniques.

11. Set-Up Reduction • The potential that reducing set-up has is difficult for most people to envision as a reality, because “that is the way we have always done it”, blinds us to the possibilities. • In order to achieve small lot production and thereby achieve significant reductions in inventory and WIP, set-up reductions must be done first.

12. Set-Up Reduction • Most Set-Up Reduction programs are a variation on the SMED program – Single Minute Exchange of Dies, developed by Shingo,as part of the Toyota Production System (TPS). • People believe SMED means all set-ups can be done in one minute or less. SMED is really a misnomer. SMED simply states that all set-ups can be reduced significantly (50-90%) through a focused, problem-solving, low-cost, no cost approach. • This training session uses Set-Up Reduction based upon SMED and the second definition.

13. Set-Up Reduction • What Set-up Reduction is not - A program to eliminate set-up people. - A panacea to overcome poor management or poor process layouts. - Requirement to spend large capital investment to attain significant benefits.

14. Set-Up Reduction • What Set-Up Reduction Is- - Is one tool of many in the drive to make processes lean through elimination of waste and excessive time. - A cost-reduction tool. - A low-cost method to achieve increased capacity from existing equipment. - Way to reduce lot sizes significantly and improve versatility of product mix through a work center to enhance customer service. - Means to have people who perform the work take “ownership” for the process and be involved in implementing solutions in their work area. - A cross-functional team approach to problem-solving.

15. Set-Up Reduction • Why Is It Important to Reduce Set-up Times? - Reduce total process time. - Reduce lot sizes to minimal levels to achieve flow. - Reduce Queue time. - Reduce Inventory/WIP - Improve Product Mix/Flexibility - Reduce costs - Increase capacity - Improve Quality - To reduce technical or special training to perform set-up.

16. Set-Up Reduction • The Goals of Set-Up Reduction Are: (1) Eliminate set-up/changeover time entirely is the optimum goal. (2) Reduce Lot Sizes (3) Reduce Lead time. (4) Reduce Inventory Costs. (5) Increase Flexibility through simplicity.

17. Set-Up Reduction (6) Improve tool and product design. (7) Improve Idle Asset usage. (8) Increased Capacity/Productivity. (9) Reduce Scrap (10) Improve Maintenance Costs. (11) Happier Customers. (12) Improved Material Flow and Usage.

18. Set-Up Reduction Elimination of Set-up or Changeover. • Goal should always be to completely eliminate any set-up or changeover time, through product redesign, machine and tooling modifications. • As a minimum, you should always use the 50% rule: If you can’t reduce set-up or changeover to zero, then through simple techniques, strive to reduce the set-up or changeover time by 50%. • When you achieve the first 50% reduction, then strive for another 50%, etc, etc.

19. Set-Up Reduction Reduce Lot Sizes - Should reduce lot sizes only after you have successfully reduced set-up time. - If you reduce lot size before reducing set-up process time, it is guaranteed that you will see an increase in costs per unit and erode any credibility to your lot size reduction strategy.

20. Set-Up Reduction • Reduce Lead Times - With increased frequency of product runs and mix, with reduction in set-up or changeover times, you will see the amount of material in queue be greatly reduced. - Queue is the single largest element in overall lead time, and its elimination is critical for successful drive toward lean. - Adjustment time is the single largest element within a set-up or changeover situation (about 50%). Reducing adjustment time will result in increased run times, thereby, reducing lead times.

21. Set-Up Reduction • Reduced Inventory Costs - Achieving significant reductions in set-up time will concurrently reduce the need for large amount of material and WIP. - Reduced Inventory costs are achieved through a reduction in required safety stocks; less scrap and rework, and smaller lot sizes. When combined, you will see how much waste you have had in the pipeline in order to handle inefficiencies and waste.

22. Set-Up Reduction • Increased Flexibility through Simplicity - Achieving set-up reductions will increase your flexibility to manufacture products to customer demands because of increased run times and reduced “waste” time. - It will require less time to change from one production product to another, thereby, increasing your productive run time, and reducing costs. - Eliminates the need for complex, specialized skills to set-up equipment and tooling so anyone can set-up/changeover.

23. Set-Up Reduction • Improved Tool and Product Design. -With a focus on reducing set-up and change over times, you will be forced to look at your tooling and product designs, finding ways to simplify and eliminate variations that do not add value to the product. Standardization in product design and tooling is key. - Tool and Product Redesign is usually done through a Concurrent Engineering team working in conjunction with Set-up Reduction teams.

24. Set-Up Reduction • Improve Idle Asset Usage. - When you successfully reduce set-up and changeover times, it is possible to expand machine utilization times that didn’t exist before. - This leads to increased production/product throughput, based upon actual customer demand, not inaccurate forecasts. - Machines are often idle more, but running more product in less time, because of increased efficiencies. - Often can negate need to buy additional equipment by utilizing current equipment more efficiently.

25. Set-Up Reduction • Increased Capacity/Productivity - With a focus on producing parts “right the first time” increase capacity/productivity is achieved. - More machine “up-time”. - Better equipment preventive maintenance results in better quality, process reliability, requiring less rework. - Tap into the “hidden capacity” in your processes.

26. Set-Up Reduction • Reduced Scrap. - Reduction in scrap through set-up reduction efforts is achieved by bringing quality problems to the surface sooner. - Less WIP means it is easier to identify quality problems sooner. - Set-up reduction is often done in conjunction with 5S and Mistake-Proofing tools. - Material and labor costs go down with less rework and scrap - Eliminates the need for 2-5% scrap in the set-up process.

27. Set-Up Reduction • Improved Maintenance Costs. - Less run time on machines allows for more preventive maintenance to be perform, thereby, reducing machine breakdowns. - As machines and tooling are taken care of better, replacement costs will go down. - Operators will perform routine preventive maintenance during times when equipment is not running. - Maintenance problems are identified sooner when combined with a 5S program to maintaining an orderly, clean work station.

28. Set-Up Reduction • Happier Customers - Set-up reduction, when combined with reduced lot sizes; less scrap; and more machine up-time, it is possible to ship 100% on time to customers, based upon actual orders. - Increased Customer Satisfaction leads to increased future business. - More time to attend to Customer Issues and resolve them permanently.

29. Set-Up Reduction • Increased Material Flow and Usage. - Through reduced lot sizes, less inventory is required, thereby, reducing material costs. - Less scrap and rework requires less material. - Producing to actual customer orders reduces the need for safety stock and inventory carrying costs.

30. Set-Up Reduction • Summary to Part I- Benefits to Implementing Set-Up Reduction: • Become more profitable. • Become more competitive. • Experience fewer shortages and stock-outs. • Improve cash flow. • Improve Inventory Turns. • Reduce indirect costs. • Improve Customer Service. • Reduce Queue Times.

31. Set-Up Reduction • Summary to Part I- Continued (9) Increase Equipment Uptime. (10) Improve Machine Efficiency and Level out Production. (11) Utilize Labor more effectively. (12) Reduce overall Cost-of-Quality. (13) Increase Manufacturing Process Flexibility and Capacity. (14) Improve overall Management and Supervisory Effectiveness.

32. Set-Up Reduction • Review of Key Points in Part I: - In your own words, write a definition of set-up.

33. Set-Up Reduction • Review of Key Points in Part I: - List the four steps in the set-up process: (1) (2) (3) (4)

34. Set-Up Reduction • Review of Key Points in Part I: - List the step in the set-up process that usually consumes the most time and offers the greatest initial opportunity for improvement.

35. Set-Up Reduction • Review of Key Points in Part I: - In your own words, define Set-Up Reduction.

36. Set-Up Reduction • Review of Key Points in Part I: - What are five goals of an effective Set-up Reduction Program? (1) (2) (3) (4) (5)

37. Set-Up Reduction • Key Points of Part I: - With what you know now about set-up list some areas within your organization where set-up reduction could prove effective and why.

38. Set-Up Reduction • What You will Learn in Part II: • Learn What Lead Time is and what are the critical elements that make up lead time. • The basic concepts and steps required to effectively implement a Set-up Reduction Program.

39. Set-Up Reduction • Lead Time What is your definition of Lead Time?

40. Set-Up Reduction The definition of Lead Time is: “ The time that is required to process an customer order from order entry through shipping the product to the customer”. In this training session we will focus on the parts of lead time that influence set-up and changeovers as part of the overall processing operation.

41. Set-Up Reduction • Lead Time is made up of the following elements: - Queue. - Transportation. - Inspection - Unnecessary Motion - Wait Time. - Rework/Scrap. - Overproduction. - Excess inventory and WIP. - Run Time. - Inefficient plant layout

42. Set-Up Reduction • Lead Time elements Queue/Wait times- - These two elements make up the two largest “waste” times for a product or item that is going through processing. - Most parts are worked on 5-10% of the time while in process. The rest of the time is “waste”, and it is the elimination of this “waste time” that causes significant reductions in overall lead times and costs. - Flow-charting and value-steam mapping a process as currently performed will clearly show where “wait” and “waste” times are in the process. - Queue/Wait time exists in most set-up processes as parts wait to be worked on during lengthy set-ups or changeovers.

43. Set-Up Reduction • Lead Time elements- Transportation - Transport Time consists of the time when parts and tooling are required to be moved from a work station to another area in order to continue the processing steps - Inefficient plant layouts are a major cause for transportation of parts. - Layout equipment and processes so parts do not require transporting between work stations by forklifts or similar means. Look to have single piece flow or small lot flow between work stations that are tied together. - Transportation time exists in set-up operations where tooling is moved between the work station and storage areas and also in move material in and out of the work station area.

44. Set-Up Reduction • Lead Time elements- Inspection - Inspection time consists of time taken to inspect parts and/or tooling to insure the tooling and parts meet specifications. - Inspection time is necessary because processes are not in control and allow too much variation to occur. - Inspection time in the set-up process occurs when the operator is required to take time to check out tooling and equipment to insure that the tooling is sharpened; correctly aligned, and is the right tooling.

45. Set-Up Reduction • Lead Time elements- Unnecessary Motion - Unnecessary motion is the result of operators having to perform repetitive movements while performing the operation that are required because of the inefficient layout of the work station, equipment and work area. - Unnecessary motions occur in set-up operations when operators are required to repeat motions to insure accuracy of tooling, machine set-up and quality of parts. - If the set-up process is re-engineered to reduce this repeated motion for checking accuracy or many fine-tuning adjustments, this “waste time” can be significantly reduced from the set-up process. - Conducting a 5S program in conjunction with a Set-Up Reduction Program, will help eliminate wasted motions through improved work station organization. - Performing Job Safety Analysis of each work station will also identify ways to ergonomically re-engineer the work station.

46. Set-Up Reduction • Lead Time elements- Rework/Scrap - Rework/scrap is the result of a process that is not reliable or consistently operating within controlled parameters. - Rework/Scrap results from trying to inspect quality in versus building quality in as an inherent part of the process. - Rework/Scrap in set-up operations results from having to perform repeated fine-tunings and adjustments to tooling, materials or equipment. - This causes production planning to add “extra parts” to complete an order to replace the parts that are consumed in the set-up operation and are scrapped.

47. Set-Up Reduction • Lead Time Elements- Overproduction - Overproduction results from trying to “plan” around the inherent and inconsistent variations in a process. - This “planning” results in not having any consistent output from running a part from one lot to the next. Sometimes you end up with too many parts and have inventory. Then the next time you run short of parts due to problems and need to enter replacement orders to complete a job. - Overproduction results in set-up operations by virtue of production planning an acceptable “loss” throughout the process to cover set-up pieces that are “scrapped”. - Overproduction in the set-up process can be overcome by eliminating the need to have planned scrap and making set-ups quick, simple and significantly reduce repeated fine-tunings and adjustments.

48. Set-Up Reduction • Lead Time Elements- Excess Inventory and WIP - Excess Inventory levels are created as a conditioned response to process variations and inefficiencies within the manufacturing process. Safety stocks and large batch runs are used to try to correct for these inefficiencies and variations, but usually are ineffective. - Excess inventory and WIP can only be successfully reduced in conjunction with a Set-Up Reduction Program that allows for rapid set-ups and changeovers and increases flexibility to run small lots to realize significant JIT benefits.

49. Set-Up Reduction • Lead Time elements- Run Time - The only real value-added time in a process is the time when a part or item is having value added to it (work). Unfortunately, in most processes (manufacturing and non-manufacturing) run time is only 5-10% of the total process time. The remainder is “waste” or non-value added. - Lengthy set-up times contribute to the long lead times and as set-up times are significantly reduced, lead times can concurrently be reduced, with positive effects of improved quality and on-time shipments.

50. Set-Up Reduction • Lead Time Elements Inefficient Plant Layout. - Plant layouts are often the result of unplanned and disjointed placement of equipment and related processes. - With the emphasis of reducing set-up costs by running EOQ’s and large batch runs, individual work station efficiencies become more important that the overall process effectiveness. - Set-up Reduction, when done as part of a total process improvement program, will demand revamping current plant layout to emphasis overall “flow” by tying processes together and introducing set-up times that make set-up a non-issue.