Ensuring Value

1
Ensuring Value

• Lean Basics
• Value-Add vs. Non-Value Add
• Process Mapping
• Production Flow Basics
• Workplace Organization (5S)

2
Learning Objectives

• Review the key concepts behind Lean Production
• Ensure a common understanding of Value Added
  tasks vs. Non-Value-Added steps (waste)
• Introduce Process Mapping as a visual tool to
  identify waste and focus improvement efforts

3
Identifying Waste

• The ultimate Lean goal the total elimination of
  waste.
• In lean terms, waste is anything that adds cost
  or time without adding value. It is something
  being done that has no value to customers, even
  though it may be included in overall cost.
• Waste is often hidden in processes, which makes
  it difficult to detect.
• Lean breaks waste into specific aspects to allow
  easier identification for focused improvement
  activities.

4
Identifying Waste (cont)

• Identifying the Seven Deadly Wastes
• Over-producing
• Waiting
• Over-processing
• Inventory
• Motion
• Defects or Rework
• Transport
• Plus One More Underutilized (Human) Resources
• The Ideal State Produce only what is required
  by the downstream process, when it is required.
  No more. No less. No sooner.

Waste is commonly categorized into seven (7)
different types. Each can be targeted
specifically to help identify the appropriate
tool to assist in its elimination.
5
The Ten Commandments of Lean

• Abandon fixed ideas Challenge assumptions / old
  thinking
• Think of ways to make it happen Get er done!
• No excuses needed (or wanted!)
• Go for the simple solution, not the perfect one
• Correct mistakes right away
• Use your wits, not your wallet
• Problems are really just opportunities in
  disguise
• Repeat Why? five times Get to the root cause!
• Seek ideas from many people
• There is no end to improvement

6
Eliminating the Seven Deadly Wastes

• Over-producing
• Establish a work flow sequence to satisfy the
  downstream customer.
• Create workplace norms and standards for each
  process
• Create signal devices to prevent early
  processing.
• Waiting
• Review and standardize processes to eliminate
  unnecessary steps.
• Cross-train employees to allow work to flow.
• Balance the workload to ensure that all resources
  are used optimally.
• Ensure that equipment, supplies and personnel are
  available.

7
Eliminating the Seven Deadly Wastes (cont)

• Over-processing
• Review value-added steps in each process.
• Review inspection and sign-off requirements
• Streamline steps and eliminate non-value-added
  tasks whenever possible.
• Inventory
• Produce only enough to satisfy the work
  requirements of the downstream customer.
• Standardize work locations and the number of
  units per location.
• Ensure that work arrives at the downstream
  process when it is required and does not sit
  there.

8
Eliminating the Seven Deadly Wastes (cont)

• Motion
• Standardize work locations and storage throughout
  the area. Use visual signage and identifiers as
  much as possible.
• Apply workplace organization to enable search at
  a glance.
• Improve workplace layout to ease travel distance
  of materials, supplies and people.
• Utilize key concepts of ergonomics to reduce
  fatigue and stress.
• Defects or Rework
• Establish standardized work procedures.
• Create and post visual job aids.
• Implement defect prevention devices and
  techniques.

9
Eliminating the Seven Deadly Wastes (cont)

• Transport
• Improve workplace layout to ease travel distance
  of materials, supplies and people.
• Eliminate temporary storage or stocking
  locations.
• Plus One More Underutilized Resources
• Survey worker skills and abilities. Post this
  skills-tasks matrix visibly.
• Seek employee involvement and participation in
  improving operations, quality and safety.
• Track machine downtime and address gaps in
  reliability.

10
What is a Process?

• A Process is a Series of Activities that
• Takes Inputs, (X1, X2, X3, Xn)
• Adds Value to those Inputs, and
• Produces Outputs (Y)
• To Add Value, a Process Step Must
• Transform or Change the Product or Service
• Be Done Right, and
• Be Considered Important by the Customer
• Ultimate test Is the customer willing to pay
  you for it?

• The value stream is all of the activities that
  are necessary to bring a specific product through
  three critical business tasks
• Problem solving
• Information management and
• Physical transformation.

11
Value-Added (VA) or Non-Value-Added (NVA)?

• Consider the following categories of activities,
  and determine whether the step should be
  considered Value-Added or Non-Value Added (i.e.,
  waste)
• Machining of Metal Shafts for Use in Gearboxes
• QA Inspection of Motor Component Dimensions
• Recovery of Excess Processed Material
• Transportation of Stored Materials to Rubber
  Processing Equipment
• Extrusion of Industrial Hoses Tubing for Use in
  Products
• Inventory Counting of Raw Materials, WIP and
  Finished Goods
• Application of Teflon Yarns as Aircraft Ductings
  Reinforcement
• Review of Quotes from Multiple Material Suppliers
• Packaging of Finished Goods for Customer Shipment
• Advertising the Features and Benefits of New
  Products
• Testing of Incoming Raw Materials

Any ideas?
12
Process Mapping Helpful Hints

• Always process map with a team. Rarely does one
  person have all process knowledge.
• Interrogate the process by watching it under many
  different conditions and activity levels. You
  must watch the process as it happens to see the
  detail you need.
• Dont let space be an issue. Use Post-Its as the
  process steps and post on a wall to get your
  initial ideas across.
• If your map does not have enough space to list
  all of the information, use numbered sheets as
  attachments.
• Maintain your Process Maps with dates and update
  them as necessary. Use them as a reference.

13
What Is a Process Map?

• A graphical representation of a process flow
  identifying the steps of the process, the inputs
  (Xs) and outputs (Ys) of the process, and
  opportunities for improvement.

14
What Is a Process Map? Another Example
Why Do It? Process maps allow people to easily
understand and identify where waste exists in the
process and where the process has been poorly
defined.
15
Process Map Goals

• What does your process look like?
• Where do the key inputs occur that affect the
  outputs?
• How do you categorize the variables?
• Are there any bottlenecks or hidden rework loops?

16
Which Process Map is Right for Me?

• SIPOC High-Level Process View
• Used for both manufacturing and transactional
  processes
• High-level approach used early in the projects
  execution
• Swim Lane
• Used for processes that cross functional or
  departmental boundaries
• Flow Charts
• Can be a good starting point for any process
• Typically used for less complex transactional
  processes
• Spaghetti Diagram
• Shows physical flow and effort

• Product Process Matrix
• Understand the commonality of certain processes
  and their impact on specific products
• Top Down Flow Chart
• Used for complex transactional processes where
  detailed steps need to be understood
• Value Stream Mapping
• Used to map and measure manufacturing processes
• Helpful in calculating Process Cycle Efficiency

There are many different process maps. These
here are the most commonly used.
17
SIPOC
Armature Production
Suppliers
Inputs
Process
Customers
Requirements
Outputs

• Raw Material
• Eng. Design
• Outside Process
• Cust. Supp. Part

• See Below

• Shaft
• Core
• Coil
• Commutator
• Coated Core
• Wound Core
• Conn. Wound Core
• Armature Complete

• Internal
• Motor Assy
• External
• Motor Customer
• Spare Part Customer

• Performance to Spec
• Parts to Print.
• Delivered On-Time
• Proper Tooling
• Competitive Price

• CTC CTQ
• Eng Dwgs.
• Job Pac
• ISO Docs
• QC Specs
• MS Specs
• Mfg. Equip.
• Labor
• Tools Fixtures

Step 1 Job Pac Release to Supv.
Step 2 CNC Turn Shaft
Step 3 Milling, Serrating, Heat Treat
Step 4 Coil
Step 5 Slot Commutator

• High-level approach used to create common
  understanding of the process
• Identifies Customers, Requirements, Outputs,
  Inputs and Suppliers to a Process
• Used for both manufacturing and transactional
  processes

Step 9 Wedge
Step 10 Comm. Press
Step 6 Stack
Step 8 Winding
Step 7 Epoxy Coat
Step 12 1st Test
Step 13 Weld Varnish
Step 11 Connect
Step 14 Turn Comm. Core
Step 15 Balance
Step 16 Final Test
18
High-Level Process View

• High level approach used to establish teams
  common understanding
• Shows functional and/or physical flow

19
Swim Lane Map
Customer
Inquiry
Start
Purchase Order
Design Approved
Evaluate
Sales
Quote Review
Order Entered
To Mfg. (outside of Project Scope)
Engineering
Preliminary Design Cost
Sample Design
Sample Job Pack
Test

• Shows key interrelationships, decision points,
  and hand-offs in cross-functional transactional
  processes

20
Flow Chart

• Shows key tasks and decision points
• Usually used in transactional processes

21
Spaghetti Diagram

• Maps physical movement of material or workers
  to indicate travel and effort
• Each line represents a task or motion
• Identifies waste from layout, storage, re-work,
  repetitive tasks, and motion

22
Top-Down Map

• Drill-down approach used to show increasing
  levels of process details

Start
Pre- Production
Review
Design
Concept
Stop
D-1
D-2
D-3
D-4
D-5
D-4a
D-4b
D-4c
D-4d
D-4e
23
Value Stream Map
1X per Week
Outside Sources
Armature Production

Raw Material
Production Lead Time
4 min
5 min
300 min
10 min
10 min
58 min
.53 min
5.62 min
Value-add Time
0 min
1.95 min
2.38 min
12.32 min
1.80 min
9.91 min
1. Hi Pot 2. Growler 3. Visual
1st Test 1. Hi Pot 2. Growler 3. Bar-Bar Res.
Final TEST
Complete Armature

• Summarizes many low-level process details with
  process data
• Aids in identifying waste in setups, cycle
  times, batch sizing, queue or wait times, yield,
  staffing

15 min
6 min
3 min
.5 min
.5 min
15 min

1.40 min
1.28 min
10.71min
1.66 min
1.36 min
1.69 min
1.42 min
Mfg. cycle time 481.03 minutes
MCE 11.23
Note
(ref) time for outside operation is not included
in MCE
Value-added time 54.03 minutes
24
Production Flow Basics

• Total Cost
• Cycle Time
• Physical Flow
• Production Yield

25
Lean Thinking Overview

• In Lean Thinking, we focus on 6 key ideas
• Specify Value, as determined solely by our
  customers
• Identify the Value Stream, to help identify
  constraints and waste in the innovation,
  production and administrative processes
• Create Rapid Product Flow, by eliminating these
  wastes
• Enable Customer Pull, whereby actual demand
  (rather than forecasts or guesses) schedules when
  activities are performed
• Seek Perfection, aiming to continuously improve
  operations over time and
• Replicate the Solutions, deploying desirable
  changes and best practices throughout the
  business.

26
Total Cost is Key

• We price our products to cover our costs and make
  a fair economic profit.
• We cost our products using three primary
  components
• Direct Labor
• Product-specific Materials and
• Overhead (utilities production and
  administrative support capital equipment usage
  packaging and support materials etc.)
• If we are ineffective in the usage of resources
  (i.e., labor, material, overhead), we either will
  reduce profit available for reinvestment or must
  seek increased prices (potentially beyond what
  many customers are willing to pay).
• In a competitive environment, either result is
  unattractive.

27
Total Cost is Key (cont)

• In Lean Manufacturing, we focus on reducing waste
  in our processes, by focusing on
• Productivity (pieces per hour cycle time
  schedule attainment)
• Quality (scrap and rework fit with customer
  needs)
• Downtime (equipment uptime availability of
  qualified personnel)
• Speed (on-time delivery lead-time
  order-to-delivery)
• Cost (to produce each piece overtime expediting)

• The Seven Deadly Wastes
• Over-producing
• Waiting
• Over-processing
• (Too Much) Inventory
• (Unnecessary) Motion
• Defects or Rework
• (Excessive) Transportation and Materials
  Handling
• Plus One More Underutilized (Human) Resources

28
Production Flow Defined

• Production Flow, as an ideal, is defined as the
  streamlined, coordinated movement of materials
  and information through a manufacturing process
  (or facility) toward the successful completion of
  an order in a timely, cost-effective fashion.
• Key Elements of Production Flow
• Satisfaction of Customer Requirements
• Coordination of Movement / Flow of Materials and
  Information
• Timely Delivery (to Downstream Processes and to
  Customers)
• Low Cost
• Little-to-No Waste

29
Cycle Time Defined

• Cycle Time is defined as the elapsed time between
  (1) the release or beginning of a work order /
  task and (2) the completion of that work order /
  task.
• Cycle Time is the total time from the beginning
  to the end of your process, as defined by you and
  your customer.
• Cycle Time includes both process time, when a
  unit is worked upon to bring it closer to an
  output for downstream use, and wait time, when a
  unit is waiting for the next action to begin.
• Note Cycle Time is not the same as Lead Time.
  Lead Time is the amount of time, as defined by
  the supplier, that is required to meet a customer
  request or demand. Frequently, Standard Lead
  Times are published in our catalogs (2 days for
  standard catalog items) or conveyed verbally to
  customers by Customer Service Reps (8-weeks lead
  time for custom products).

Consistent, Fast Cycle Times Enable Production
Flow
30
Cycle Time Barriers
Multi-Step Process
Operation 1
Operation 2
Operation 3
Operation 4
Output
Input
Cycle Time

• Exercise List the cycle time barriers in your
  environment

• Process flow (physical and information flow)
• Outside operations
• High processing time (Value Added time)
• Scheduling issues

• Typical barriers
• Queue/waiting time
• Setup
• Rework
• Batch processing
• Bottlenecks

31
Physical Flow

• Physical Flow represents the path of movement a
  product family follows through a facility. The
  flow of the material (or a worker) is traced
  though the facilitys layout, showing the path
  and distance traveled while completing a task.

• Effects of Poor Physical Flow
• Long process cycle times
• Excess materials handling or wait times
• Damage to goods in-transit
• Increased chance for injuries
• Poor visibility to actual production
• Typical Causes of Poor Physical Flow
• Lack of materials handling equipment
• Long distances between work stations
• Large loads, batches or transfer sizes
• Un-ergonomic placement of equipment
• Poor process design or task order

32
Production Yield

• The Production Yield represents the percentage of
  product in a production run that meets customer
  requirements. The yield is expressed as a
  percentage, of units of good product relative
  to total units started in the run.
• When scrap or rework is created, additional
  effort (cost) is required to replace or repair
  units in order to completely fill an order.
• If a process has a stable yield of 80, in order
  to get 100 acceptable units, materials, energy
  and effort for 125 units must be placed into the
  process. (125 started x 80 100 good units)
• Variation in the process yield further adds to
  costs. Assume an order requires 100 units. If
  this process unexpectedly yields only 75 good
  units (and not 80), a scheduled run (125 units)
  will produce only 93 acceptable items. This will
  require an unplanned production run (to obtain
  the missing 7 units), create a late delivery
  (with excess freight costs), or prompt order
  cancellation.

33
Production Yield (cont)
Good Product
Scrap Rework
Production Yield 12/15 80

• Effects of Poor Yields
• Scheduling conflicts with other work
• Capacity loss for other orders
• Materials loss for other orders
• Overtime costs
• Expediting costs
• Freight costs on back orders
• Late deliveries
• Order cancellations
• Customer complaints
• Lost sales / missed opportunities

• Typical Causes of Poor Yields
• Non-standardized work procedures
• Variation in materials or inputs quality
• Variation in machines operation
• Measurement variation
• Incorrect setup or other operator error
• Poor process design

34
Foundations for Value

• How do we ensure customer value? Through
• Speed in order-to-delivery, in quoting, and in
  time-to-market and through better physical and
  information flow
• High Production Yields, with little variability
  and high consistency
• Manufacturing Flexibility, to adjust to
  ever-changing levels of customer demand
• Our next topic Workplace Organization
  represents the core that enables speedy responses
  to customer demand and faster setups
  changeovers.

35
Workplace Organization
36
Workplace Organization Defined

• Workplace Organization is defined as the
  establishment and maintenance of an organized,
  clean, and safe workplace targeted at
  establishing consistent, high levels of
  performance.
• In an organized workplace, any individual can
  readily distinguish between normal and abnormal
  conditions at a glance!
• An organized workplace is the foundation for
  continuous improvement, zero defects, cost
  reduction, and a safe work area.
• The principles of workplace organization create a
  systemic way to improve the workplace, processes,
  and products through the active involvement of
  front-line employees.

37
Why Encourage Workplace Organization?

• Because a Neat and Clean Workplace
• is a much safer place to work
• provides an improved environment for the
  operator
• enables higher productivity and efficiency
• produces higher yields, fewer defects and lost
  material and
• meets deadlines better.

38
5S Enables Workplace Organization

• 5S is the basis for Lean Manufacturing and the
  foundation for a clean and organized workplace.
• Sort (Segregate and Eliminate) Clearly
  distinguish needed items from unneeded items and
  eliminate what is not needed.
• Set In Order (Arrange and Identify) Keep needed
  items in the correct place to allow for easy and
  immediate retrieval by anybody.
• Shine (a.k.a. Sweep) (Daily Cleanup) Keep the
  work area swept and clean.
• Standardize (Constant Adherence to 1st Three Ss,
  plus Safety) Perform standardized cleanup
  actions that are specific, safe and easy to
  perform.
• Sustain (Achieve Habitual Compliance) Promote
  adherence to maintaining a high-performance,
  high-quality, and safe work environment. Use
  visual performance measurement tools.

39
Step 1 SortExamples of Sort
Photos courtesy of Peerless-Winsmith,
Springville, NY
Before many unused tools / fixtures on workbench
After workbench cleared of unnecessary items
Organized workstations reduce search time and
clutter!
40
Step 2 Set in OrderExample of Set in Order
Photos courtesy of Ohio Electric Motors,
Barnardsville, NC
Before general fixtures disorganized in closed
cabinet
After fabricated tilted stand for easy view of
fixtures
Organized workstations enable much faster set-ups!
41
Step 3 ShineExample of Shine

• Cleaning Schedule
• Detailed responsibilities
• Which areas to clean
• Which times of the day

Clean machinery is much easier to maintain and
inspect!
42
Step 4 StandardizeExample of Standardize
Keep it visual
Results of standardization
Photos courtesy of Hardinge Corp, Elmira, NY
43
Is 5S Truly Useful?

• How would an organized workplace impact your
• Cycle Time?
• Physical Flow?
• Production Yield?

Any ideas?
44
5S Usage in Improvement Activities

• When to Use 5S?
• In manufacturing, use 5S as one of the first
  Improvement activities, to make future changes
  such as Setup Reduction more efficient.
• In office environments, use 5S as one of the
  later Improvement activities, to standardize
  procedures and cross-train staff.
• Where could you see real benefits from 5S in your
  facility?

Any ideas?
45
Takeaways

• A solid focus on production flow enables cost
  control and cost reduction, market
  competitiveness, and enhanced customer value.
• Time is money. Cycle time represents the elapsed
  time between the start of an order and the
  completion of those process-related tasks.
  Ineffective, inefficient processes cost companies
  real money, and many of our continuous
  improvement efforts aim to recapture those lost
  profits.
• Flow represents effective coordination among
  materials and information to ensure that no waste
  is added to costs.
• A stable and predictable Production Yield
  improves overall sales and production planning,
  while an improving Production Yield minimizes
  production costs.

46
Takeaways (cont)

• Implementing 5S (Workplace Organization) will
• Improve safety
• Create a clean, orderly workplace
• Improve efficiency
• Increase employee morale
• Help standardize work methods