Lean Manufacturing

1. Lean Manufacturing Group 6: May Adejinle Ika Lambogo Kevin Rosenquist

2. AGENDA:

3. INTRODUCTION

4. EMD builds, sells, and services railway transport locomotives. • Manufacture diesel engine solutions for: Marine ships, Oil rigs, and Power generators. • EMD products can be found operating in over 70 countries from Argentina – Zimbabwe. • The Company is the only diesel-electric locomotive manufacturer to have produced more than 72,500 engines and has the largest installed base in both North America and worldwide Introduction

5. INTRODUCTION History

6. INTRODUCTION • Benefit of recent acquisition: • EMD can compete with rival manufacturer, General Electric • Headquarters is located in LaGrange, Illinois • Includes engineering facilities and parts-manufacturing operations. • EMD Plant in London, Ontario • Final assembly of the locomotives is conducted here in London • Their products are then exported to customers around the world.

7. INTRODUCTION • EMD customers attain new levels of availability, reliability and asset utilization through: • Technological Improvements • Proactive Environmental Measures • Customer-Focused Solution • EMD pride itself for listening to and supporting customers, pursuing continuous improvement, and building on a reputation for manufacturing excellence.

9. INTRODUCTION VALUES • Focus on the Customer • Deliver on Our Commitments - Achieve Results • Lead with Integrity and Trust • Act Quickly and with a Sense of Urgency • Creatively Innovate Our Products and Services • Communicate Our Vision and Purpose • Develop and Motivate Our People • Continuously Improve Our Processes • Work in Teams • Recognize and Reward those who Walk this Talk MISSION To restore Electro-Motive to its position as market leader - not by recreating the past, but by embracing the future VISIONWe will: Be highly responsive to customer needs and issues Deliver more reliable, more fuel efficient, more innovative, and more cost-effective locomotives, parts, and services Make money, enabling a return on investment and business reinvestment Grow, through identifying new ways to better serve our customers

10. INTRODUCTION Questions For You! Which company recently acquired EMD? What year?

11. METHOD

12. METHOD Introduction to Lean: • Lean is a methodology that emphasizes the minimization of activities that do not add value to the customer • Used to increase and sustain quality, improve process, and reduce costs by eliminating waste. • 2 common goals of Lean: • To improve quality by having the company understand its customers’ needs & wants • To eliminate waste

13. METHOD Brief History of Lean: • Lean principles come from Toyota, but was first coined in 1988 by John Krafcik in an article called “Triumph of the Lean Production System.” • The Ford Factor • Toyota in 1953 • The idea finally took hold in the US in the late 1970’s and 1980’s due to Japanese manufacturing competitors’ price & quality.

14. METHOD Toyota Production System: • Toyota Production System (TPS) is another term for Lean • TPS has two pillar concepts: • Just-in-Time (JIT) – Continuous Flow • Jidoka – focuses on the “Human Touch”

15. METHOD Lean Tools • 5S Process: • Seiri, • Seiton, • Seiso, • Seiketsu, • Shitsuke • (Sort, Set in Order, Shine, Standardize, and Sustain).

16. METHOD Lean Tools • Kaizen • Japanese for “Improvement”, is a philosophy that focuses on continuous improvement of processes DMAIC Framework

17. METHOD Lean Tools • Kanban • Japanese for “Sign-Board” or “Billboard”, is a scheduling system used to determine what to produce, when to produce and how much to produce.

18. METHOD Types of Waste

19. METHOD Question For You! Name One Type of Waste?

20. RESULTS

21. RESULTS Interview Background • One-on-One Interview: • Earl McDonald II, CPIM, CSCP, the Master Scheduler at EMD • Email Interview: • Jim Albrecht, Director of Central Technical Services at EMD LaGrange

22. RESULTS Early History of Lean at EMD • 1980’s - 1990’s • EMD worked on leaning the business • Companies’ lean advances soon disappeared & relapsed. Recent History of Lean at EMD • Late 2000’s • EMD reassessed its lean implementation from the 80’s & 90’s and decided that they needed to successfully reinstate lean to survive. • Hired employees that understand what it takes to implement lean (General Motor, Consulting Leadership)

23. RESULTS Challenges of Implementing Lean at EMD Keeping the factory floor organized following the 5S process. Started organizing their 800,000 square foot, 750 employee LaGrange plant over 2 years ago, but they are not done. Employees need to be intrinsically motivated to implement and sustain lean initiatives.

24. RESULTS

25. RESULTS Challenges of Implementing Lean at EMD Keeping the factory floor organized following the 5S process. Started organizing their 800,000 square foot, 750 employee LaGrange plant over 2 years ago, but they are not done. Employees need to be intrinsically motivated to implement and sustain lean initiatives.

26. RESULTS ERP SYSTEM Undergoing Change Management

27. RESULTS Benefits Results were realized as soon as lean was implements in 2008. • The main benefits were seen in the assembly of the engine itself. • What used to take about 3weeks now only takes 3days • EMD’s OSHA recordable injury frequency dropped by nearly 80%

28. RESULTS Impact of Lean • Lean has positively impacted almost every facet of the organization • Reduction in: • 80% Scrap rates • 75% Labor per part manufactured • 60% Inventory levels in the operations • 30% Fuel consumption

29. RESULTS Impact of Lean • What kinds of LEAN tools are used by EMD? • We value stream map, 5-S, some Kanban, and poka yoke are used in our manufacturing engineering new product introduction processes. We are managing flow with some Kanban, and are controlling flow to enable the pull systems to be exercised.

30. RESULTS EMD utilizes lean tools: • Total Quality Management • 7 Step corrective action processes • Leadership Development/Training for various levels of the organization. • Various quality control tools • Flowcharts • Run Charts • Check Sheets • Histograms • Pareto Charts • Fishbone Diagrams (cause and effect) • Scatter Diagrams

31. RESULTS EMD Focuses Heavily on 8 Wastes: Overproduction Transportation Inventory Motion Waiting Over-Processing Defects Unused Human Talent

32. RESULTS EMD Defines Waste • Overproduction: • Corrected by leadership giving direction • Transportation: • EMD focuses on unnecessary movement of parts.

33. RESULTS EMD Defines Waste • Inventory: • Inconsistent processes and bad planning create inventory shortages/overages

34. RESULTS EMD Defines Waste • Motion: • Overhead bridge cranes are all over the place, and crane operators need to travel the length of the warehouse to get them. • People have to get out of the way and wait for the piece to be set down before passing

35. RESULTS EMD Defines Waste • Waiting: • Equipment and Human time not utilized and unnecessary inventory. • Causes higher costs, increased cycle times, and heightened quality risk. • Ex: When cranes are overhead, workers sometimes have to wait long periods of time until it is safe to pass.

36. RESULTS EMD Focuses Heavily on Waste: • Over Process: • Result from poor product design requirements and specifications. • A lot of rework is needed with welding and retooling.

37. RESULTS EMD Defines Waste • Defects: • Difficult to prevent when there is clutter with inventory and inconsistent flow. • EMD can find some issues with software (emissions testing) • Waste of Unused Human Talent: • This waste is hard to measure. • Example: Microsoft Excel

38. RESULTS Question For You! What was the primary challenge in implementing Lean at EMD?

39. DISCUSSION

40. DISCUSSION EMD’s Approach to Quality:

41. DISCUSSION Effectiveness of Lean • Implemented in 2008 • 2 months initiate the first improvement • 2.5 years & on going process • Main difficulty was to create 5S environment in 800,000 sq foot facility with 750 employees.

42. DISCUSSION Effectiveness of Lean: 80% Scrap Rates 75% Labor/part 60% Inventory 35% Fuel Consumption

43. DISCUSSION Recommendation • EMD needs to implement a better strategy for “Change Management” & Training

44. DISCUSSION Future Direction We believe that EMD will continually improve their lean manufacturing processes. • Culture of teamwork • Improvement • Communication • Urgency to change EMD will be able to see much better improvements in the productivity, costs, quality, and so on.

45. DISCUSSION Question For You! Name 1 Strength & 1 Weakness at EMD?

46. DISCUSSION Lessons Learned We learned how Lean was incorporated into a company. Communication Time management is very crucial Early is better than late!

47. QUESTION?