Principles of Lean Bill Kerber CFPIM Strategic Information Group

1. Principles of LeanBill Kerber CFPIMStrategic Information Group

2. Thanks to these guys for letting me use their stuff • Jim Womack www.Lean.org Value Stream Mapping • Kevin Duggan www.Dugganinc.com, Mixed Model Value Streams • Mike Rother and John Shook, Learning to See, LEI • Mike Rother and Rick Harris, Creating Continuous Flow, LEI Bill Kerber CFPIM Strategic Information Group

3. Lean • What does it mean to you? Bill Kerber CFPIM Strategic Information Group

4. What is the Value Stream? All the steps needed to proceed from: • Concept to launch (design) • Order to delivery (build) • Delivery to recycle (sustain) Bill Kerber CFPIM Strategic Information Group

5. As We Search for the Perfect Process In which every step in each process is: • Capable – right every time (6 Sigma) • Available – always able to run (TPM) • Adequate – with capacity to avoid bottlenecks (right-sized tools & lean manufacturing system design) Bill Kerber CFPIM Strategic Information Group

6. Objective for Every Value Stream • Correct specification of value • Elimination of wasteful steps • “Flow where you can” • “Pull where you can’t” • Management toward perfection Bill Kerber CFPIM Strategic Information Group

7. The Goal of Lean Manufacturing • A continuous flow of material from raw material to finished goods • Produce only what is needed • Build to order (Production L.T. shorter than Demand L.T.) Bill Kerber CFPIM Strategic Information Group

8. Building Blocks Bill Kerber CFPIM Strategic Information Group

9. Waste • An activity that consumes resources but creates no value for the customer Bill Kerber CFPIM Strategic Information Group

10. Kaizen • Continuously improving in incremental steps • Usually a focused effort to remove waste from an activity, for example a machine set up Bill Kerber CFPIM Strategic Information Group

11. 5 Principles of Lean • Value Stream: Identify the value stream for each product or service, comprised of every action responsible for its design, order and provision. Eliminate actions that create no value. Bill Kerber CFPIM Strategic Information Group

12. 5 Principles of Lean • Value: Specify value from the perspective of the customer, not the firms, departments and facilities that comprise the supply chain. Bill Kerber CFPIM Strategic Information Group

13. 5 Principles of Lean, cont. • Flow: Align all value-creating steps so that the design, order and product itself move steadily and rapidly toward the customer with no detours, waiting or scrap. Bill Kerber CFPIM Strategic Information Group

14. 5 Principles of Lean, cont. • Pull: Make products flow only at the pull of the customer, so the exact good is provided at exactly the right time. Bill Kerber CFPIM Strategic Information Group

15. 5 Principles of Lean, cont. • Perfection: Re-evaluate every value stream to make value flow faster at the precise pull of the customer • Old-school, we used to call this continuous improvement Bill Kerber CFPIM Strategic Information Group

16. The 5 S’s Bill Kerber CFPIM Strategic Information Group

17. Logical Steps • Identify Product Families • Map Value Stream • Create flow • Level • Pull • Perfect (Continuous Improvement) Bill Kerber CFPIM Strategic Information Group

18. Product Families Bill Kerber CFPIM Strategic Information Group

19. Product Families • This process is reiterative, based on the process flow design and the volumes of the products. • Products may be added or subtracted from the family as needed. Bill Kerber CFPIM Strategic Information Group

20. Value Stream Mapping • We will cover this in depth in the next section Bill Kerber CFPIM Strategic Information Group

21. Flow • Cell design • Work Balancing • Kaizen • Product mix Bill Kerber CFPIM Strategic Information Group

22. Level • Plan for the demand • Chase, Level or Hybrid? • Always try for Chase • We will call beginning of this process the Sales and Operations Plan (to be old school about it) Bill Kerber CFPIM Strategic Information Group

23. Takt Time • Pace of customer demand • Takt time synchronizes pace of assembly to match pace of sales • The system should be designed to produce slightly faster than takt time Bill Kerber CFPIM Strategic Information Group

24. Takt Time • In chase, it is the sales rate to the customer • In Level, it is the replenishment rate to inventory Bill Kerber CFPIM Strategic Information Group

25. EPEI • Every Part Every Interval • How long does it take to cycle through all of the products in the family • Smaller is better Bill Kerber CFPIM Strategic Information Group

26. Small intervals mean small lot sizes • Shorter lead times • Less inventory • Less space • Better quality Bill Kerber CFPIM Strategic Information Group

27. Pull • Push versus pull • What are the advantages of pull? • Where flow stops, add a supermarket • Say what? Bill Kerber CFPIM Strategic Information Group

28. Kanban is not the objective • It is second best to continuous flow (assembly line-like production) of one piece moving at a time • Only mismatched processes should use Kanban Bill Kerber CFPIM Strategic Information Group

29. Pull systems work when: • Demands come in a preset pattern • Production system is reliable • Otherwise, these are reorder points on dependent demand items • Use MRP instead, even though this is a bad word in these circles Bill Kerber CFPIM Strategic Information Group