The Lean Enterprise

1
The Lean Enterprise

• Standardized Operations/ Standard Work

Lean Foundations Continuous Improvement Training
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Learning Objectives

• Generate Ideas to Improve Existing Process
• Utilize Expertise of all Team Members
• Prioritize and Implement the Changes
• Identify Future Process Improvements
• Identify three advantages of standardizing
  operations in your area

3
Learning Objectives

• Improve your work area utilizing Standardized
  Operations
• Kaizen your area with simple, effective changes
• Share key learnings
• with others

4
By-Products of unorganized Workplace

• Safety risks due to physical obstacles and hidden
  hazards
• Product defects and equipment breakdowns
  resulting from a dirty environment
• Lost productive time searching for material
  tools
• Poor customer responsiveness and incorrect
  shipments
• Difficulty in distinguishing between what is
  good/ bad or needed/ unneeded

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Goals of Standardizing

• Capture and use the safest, best and easiest
  method
• Build safety, quality, WIP limits productivity
  into the process
• Change easily (Continuous Improvement Mentality)
• Identify Areas of Waste Opportunities
  

Any opportunities here?
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Waste

• The elements of work that add no value.
• Waste only adds cost and time.

• Things to remember about Waste
• Waste is not the problem it is a symptom
• Waste points to problems within the system
• (At both process and value stream levels)
• We need to find and address the cause of Waste

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Simply, Standardization is the...

Safest
Best
Fastest
method to do your job !
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Standardization incorporates Visual Management
techniques

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Benefits of Standardization

• Teamwork
• Everyone is able to participate and make
  improvements
• Communication
• Improved relations between workers and between
  workers and management
• Education
• Improved problem solving

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Benefits of Standardization

• Awareness
• Understanding of broad issues and objectives
• Confidence
• Stronger feelings of self worth
• Empowerment
• Increased control over the job and work
  environment

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Provides Benefits to All Employees

• Success of the company safer operations and
  better personal job security
• Improved quality of life in the workplace
• Improvement in solving problems, making decisions
  and improving product quality due to shorter time
  frames
• Control/ ownership over the improvements in your
  process/ job function

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3 Elements of Standardized Operations/ Standard
Work

• Machine Utilization

• Work Sequence

• Standard Work-In-Process Stock

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Machine Utilization

• Document "Best" Methods
• Time Balance/ Fairness
• Time Baseline for Continuous Improvement
• Responsibility Operations

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Methods Study

• Document "Best" Methods
• Time Balance/ Fairness
• Time Baseline for Continuous Improvement
• Responsibility Operations

15

Methods Study Refer to Lean tools Module
D
C
A
B
Mode
Recall
Start
Split/Lap
Stop
Time/Set
Select
Reset
Min
Time Elapsed From Start to Current Operation Lap
Time
00002.00
Split (1)
Lap Time Between Operations
0000.00
Lap
Recall

1/100
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Time Observation Sheet - example
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Measure Waste With Data Examine and analyze
Time in 3 areas
People
Time in a Typical Plant
"Waste"
waiting
for
materials,
watching
Value-
machines
run,
producing
defects,
looking
Added
for
tools,
fixing
machine
breakdowns,
Portion
of Time
producing unnecessary items, etc.
Waste
Time in a Typical Plant
Materials
Value-
"Waste"
transportation,
storage,
Added
inspection and rework.
Portion
of Time
Waste
Machines
Time in a Typical Plant
"Waste"
unnecessary
movement
of
Value-
machine,
setup
time,
machine
breakdown,
Added
Portion
unproductive
maintenance,
producing
of Time
Waste
defective
products,
producing
products
when not needed, etc.
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Measure Waste With Time
People Best Practices
People
Time in a Typical Plant
"Waste"
waiting
for
materials,
watching
Value-
machines
run,
producing
defects,
looking
Added
for
tools,
fixing
machine
breakdowns,
Portion
of Time
producing unnecessary items, etc.
Waste

• Demand adherence to standard operations
• Document your standard operations
• Train to achieve consistent performance
• Record key measures daily
• Keep measures continually updated

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Measure Waste With Time
Materials Best Practices

• Understand customer demand of products
• Implement continuous flow

Time in a Typical Plant
Materials
Value-
"Waste"
transportation,
storage,
Added
inspection and rework.
Portion
of Time
Waste

• Distribute work evenly by volume and variety
• to allow smaller orders by the customer

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Measure Waste With Time
Machines Best Practices

• Measure/ Manage Equipment States
• Production Time
• Downtime
• Set-up Time
• Non-production time

Machines
Time in a Typical Plant
"Waste"
unnecessary
movement
of
Value-
machine,
setup
time,
machine
breakdown,
Added
Portion
unproductive
maintenance,
producing
of Time
Waste
defective
products,
producing
products
when not needed, etc.
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Takt Time

• Definition
• The beat of production
• - or -
• Customer demand stated in time
• Work Time Available
• Average Demand

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Takt Time
Synchronizes Pace of Production to Match Pace of
Sales Rate for producing a product, and
its components, based on sales rate.
59 sec.
59 sec.
59 sec.
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Calculating Takt Time
1 shift 8 hours x 60 min 480 min
Breaks 30 min / shift
480 min - 30 min 450 min / shift available
Takt Time

Time Available in 1 day

Number of Units Sold that Day
Takt Time

1 shift x 450 min / shift x 60 sec

900 Units Sold
27,000 sec
Takt Time



30 sec/unit

900 units
"Line Takt Time"

30 sec/unit x 90


27 sec/unit
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Takt Time / Cycle Time
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Use Bar Chart to Eliminate Waste
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Re-balance Work Loads/ Tasks
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3 Elements of Standardized Operations

• Machine Utilization

• Work Sequence

• Standard Work-In-Process Stock

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Work Sequence - example

• Products are made using consistent best methods
• These best methods are followed by the teams as
  the baseline for the next improvement

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Process Documentation Set (IPO)

• All work is the result of a process
• A process is comprised of Activities
• A process has owners and accountabilities

Process
Inputs
Outputs

• Who are the customers?
• Are their needs met what changes are wanted
• How do they use the outputs
• What measures are used

• Who supplies?
• To what specs
• Who specifies
• How often by when
• What QC exists

• Who performs the tasks?
• How often by when
• How long does it take level of effort
• What problems exist
• How are they corrected
• What QC exists
• Information management technology

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Standardized Operations Improvement Questions

• There are 3 levels of Process Detail
• What follows is a extensive list of
• Questions to ask at each level and with each
• action during the Process Analysis team
• activities

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Process Boundaries
Level 1 Process Detail

• What activities or events begin (trigger) the
  process?
• What activity or event ends the process?
• Who are the departments/groups involved (swim
  lane titles)
• What is the operating cycle of the process? How
  long does it take? Is is done periodically? Or on
  demand?

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Process Boundaries
Level 1 Process Detail

• How (direct, indirect) is the process owned and
  by whom (sole or shared ownership) Where and how
  is ownership defined?
• How is functional reporting aligned to the
  process or activity sub sets? (i.e. if you own
  it, can you control it?)
• Which process activities are mission critical?

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Example of Level 2 Process Map (swim lane)
Maintenance Management
Weekly Planning - Process Map
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Suppliers, Performers, and Customers
Level 2 Process Detail

• Who is involved in this process?
• Who supplies the information to the process?
• Who uses the information?
• Who receives the information?

Upstream Process
Downstream Process
Performers of the process
(Suppliers Or Customers)
(Customers)
Information
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Process Measures and Calculation Definition
Level 2 Process Detail

• What are the process measures?
• How are they used?
• What are the specific measures for the individual
  process activities?
• What considerations does the process owner use to
  judge the process?

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Process Measures and Calculation Definition
Level 2 Process Detail

• What process metrics and stats do you get from
  other plants? What else would you like to get?
• Do you feel the present process measures reflect,
  accurately, the operation of the plant and its
  production variances?
• What process measures are monitored daily
  weekly monthly annually?

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Information Management Technical Dimensions
Level 2 Process

• What software (commercial, home grown) tools are
  used for each activity?
• control, monitoring, reporting, remediation
• What hardware platforms are those software pieces
  resident on (LAN, WAN, PC)?
• If information is transmitted off-site, which
  network is it done on?

38
Information Management Technical Dimensions
Level 2 Process

• What volume and frequency of use is required of
  the network?
• Who supports the software in the plant?
• Who supports the hardware in the plant?
• What problems have been encountered in the recent
  past with software or hardware?
• How was the problem rectified and how well?

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Problems, Issues,and Changes Required to current
process
Level 2 Process

• What problems exist with the process and where?
• Where do most of the difficulties arise?
• What are the impacts/consequences of these
  problems?
• When problems arise, how are they currently
  resolved?
• Who is responsible for resolving these problems?

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Problems, Issues,and Changes Required to current
process
Level 2 Process

• Are the problems information related or
  operationally related?
• Can these problems be resolved by redefining the
  process?
• What improvements do you require for this
  process? (enhancements)
• What is the perceived benefits of the changes?

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Deployment (roles responsibilities)
Level 2 Process

• For each activity, what is the role of the
  individuals involved
• How is each person involved in the process
  (RACI)
• How much time is spent on each activity by each
  person
• Is the role and responsibility level suited to
  that persons skill level

42
Level 3 Process Activity Sequence
Level 3 Process Detail

• What are the activities (sequence) in each box of
  the preceding level 1 diagram?
• What is the elapsed time for the whole process
  where are there critical due dates?
• Which are key activities which are support
  activities? (internal view)
• Which processes are sequential and which are
  parallel?

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Level 3 Process Activity Sequence
Level 3 Process Detail

• Are there any checkpoints in the process - where?
• How is failure mode evident in the process or at
  critical activities?
• What are the rework or failure correction
  activities?
• Which activities are valued added vs non value
  added? (external view)

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Level 3 Activity Inputs, Processing and Outputs
Level 3 Process Detail

• For each of the activities,
• What are the inputs, procedures, and outputs who
  is involved?
• Documentation examples relevant to the process
  areas
• What internal quality control mechanisms are
  employed in these processes? (e.g. error feedback)

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Level 3 Activity Inputs, Processing and Outputs
Level 3 Process Detail

• For each of the activities,
• How long does one cycle take for each
• phase - input, processing, output?
• Who owns the process? (individual, group)
• Is this the correct individual to own the
• process? (i.e. suited to their skill level)

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Level 3 Decision Points or Audit Controls
Level 3 Process Detail

• What decisions are made in the process? (logic
  of the decision is level 3)
• Where are the key decision points made during the
  process (level 2)?
• Who has authority for making those decisions
  (what, where, whom)?

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Level 3 Decision Points or Audit Controls
Level 3 Process Detail

• Is there data integrity provided in the process
  if yes how is it provided?
• Are there audit control points in this process?
• Who performs the audit process (and how
  frequently)?
• What is done with the audit information - is
  there follow-up?

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Example Level 3 Maintenance Management
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Product/ Process Activity

• There are 4 activities the product can be engaged
  in

World-class
Transportation lt 2
Storage lt 18
Inspection 0
Processing gt 80
What are the barriers to adding value to the work
sequence?
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Work Sequence Best Practices

• Balance the Work Load Among Employees
• Reduce the Walking Distances
• Keep Only the Necessary Quantities of In-Process
  Stock at the Work Station
• Automate Machine Feed and Ejection
• Change the Height, Angle or Location of the Part
  Racks
• Change the Work Sequence
• Use Two-Handed Work Where Possible
• Reduce the Manual Adjustments Necessary to Make
  Different Parts
• Use Specialized Tools
• Develop Countermeasures to Prevent Defects

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Work Sequence Key Future State Questions

• Demand
• Takt time ?
• Material flow
• Where can we use one-piece flow ?
• Where can we use FIFO (first in- first out) ?
• Where do we have to use supermarket-based pull ?
• Information Flow
• At what single point in production, can we do
  trigger production ?
• How much work do we release and take away ?
• How do we level the production mix ?
• Supporting Improvement Initiatives
• What other process analysis techniques could we
  utilize?
• e.g. - TPM (OEE,uptime), Poka-Yoke (mistake
  proofing), Changeover

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3 Elements of Standardized Operations

• Machine Utilization

• Work Sequence

• Standard Work-In-Process Stock

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Stocking Strategy Design Approach

• The key to designing the right stocking
  strategy is to understand
• Demand Variability
• Customer lead time expectation
• Internal process flexibility (part location/value
  considerations)
• Outside processing
• BOM level changes
• Distribution Centers One to many/ many to one
• Generic to unique differentiation points
• and then design to these
• requirements/ constraints (examples
  follow)

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Demand Variability
Because customer demand has variability, we must
buffer inventory to compensate.
demand profile
This chart shows an extreme amount of
variability in demand, but for many companies
this is not out of the ordinary.
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Supply Chain vs. Customer Window
StrategicBuffer?
StrategicBuffer?
StrategicBuffer?
StrategicBuffer?
Purchasing
Order Entry
Shipping
Manufacturing Cycle Time
Customer
Where is the Customer Window ?

• We typically buffer finished goods when the
  marketplace (customer) expects a shorter lead
  time than our process(es) can deliver.
• Stocking Strategy comes into play in
  understanding where and what mix of finished
  goods to place in strategic buffers.

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Strategic Buffer LocationsProduct Stocking
Strategy Defined

• Customer sees full process time
• Fab time for spares, fab assy for completes
• Quick response (some lead time acceptable)
• Less risk
• Inventory is typically more flexible (e.g.
  castings)

• Customer sees only the (short) assembly time
• Good option for maintaining stock of flexible
  components
• Pass through for high volume spares
• Moderate risk for obsolescence

Procurement
Fabrication
Assembly
Customer

• Immediate response (e.g., spares)
• High volume, stable demand
• Market requirement
• Highest risk for obsolescence, etc.

• Customer sees entire lead time (procure
  process)
• Low volume, custom orders
• Slow response time
• Least risk
• Inventory is purchased for a specific order

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Strategic Buffer Locations Inflexible to
Flexible Processes
A
B

• WCT A gt WCT B
• Value at B gtgt Value at A
• Flexibility of Inventory of A vs B

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Strategic Buffer Locations Flexible to
Inflexible Processes

• WCT A lt WCT B
• The larger batch requirements for loop B make an
  intermediate buffer unattractive

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Strategic Buffer Locations Outside Processing
In-House Operations
Strategic Buffer
Outside Processing

• Buffers against vendor uncertainties /
  deficiencies

60
BOM Level Changes / Differentiation Points

• Major assembly points may be good strategic
  buffer locations
• Component parts are typically flexible, while
  assembly may make parts unique

61
Distribution CentersOne to Many

• One facility supplying multiple Distribution
  Centers (DCs)

DC Min Ship (min SS)
DC Min Ship (min SS)
Cycle Stock Safety Stock
DC Min Ship (min SS)
Customer

• Unless DC to DC transfers make sense, cycle stock
  and safety stock should remain at common location
• Minimizes distribution inventory by taking
  advantage of volume smoothing

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Distribution CentersMany One

• Multiple facilities supplying a single
  Distribution Center (DC)
• Since the destination is a constant, storing
  cycle stock at the DC should allow a reduction in
  the safety stock level

DC Safety Stock Min Ship
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Distribution CentersMany to Many

• Multiple facilities supplying multiple
  Distribution Centers (DCs)

Cycle Stock
DC Safety Stock Min Ship
DC Safety Stock Min Ship
Cycle Stock
DC Safety Stock Min Ship
Cycle Stock

• Effectively works the same as one to many

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Stocking Strategy Best Practices

• Gather data and review to understand current
  market lead time expectations
• Gather data to understand customer expectations
  by product / segment
• Gather data and review to understand current
  ability to meet market and customer expectations
• Perform product rationalization on existing
  products
• Perform 80/20 analysis (Pareto) on products to
  understand what is shipped and when
• Develop stocking strategy by product group/ line
  to meet market and customer expectations

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Standardized WIP Stock Supermarket example
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Supermarket Pull System
Following processes go to preceding processes and
withdraw what they need when they need
it. Preceding processes produce what is taken
away.
WITHDRAWAL Kanban
PRODUCTION Kanban
Supplying Process
Store
Withdrawn Product
New Product
Purpose - A way to control production
between flows - Gives production instruction
without schedules
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In summary, Standardization is ...

• The Most Efficient Way to Manufacture Products
  Without Waste by Seeking the Best Combination of
  Human Work With That of Machine.

Auditing for Standardization Means That

• Operators Do the Same Sequence of Work Each Time.
• Operation Methods Are Thoroughly Documented and
  Located Near the Work Station.
• Operators Use the Same Proper Tools and Machines.
• Material Is Stored in the same place Each Day.
• Among others (Audits should be part of a
  Continuous Improvement Plan)

68

Audit Form - example
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Standardized Operations Best Practices

• Only make a component or sub-assembly when it is
  needed at the next step (Just-in-Time)
• Eliminate process disturbances - smooth flow
• Capture and correct defects at the source
  (Jidoka) and find permanent corrections utilizing
  Root Cause Analysis (RCA) techniques
• Standardize process and methods to reduce defects
• Maximize Employee Involvement to help solve
  problems and improve processes

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Best Practices continued

• Operators do the same sequence of work each time
• Material handling people should make the pick-ups
  and deliveries on a pre-determined schedule
• Operation methods are thoroughly documented and
  posted by the workstation
• Standard tools and machines
• Material is stored in the same place each day
• Information is presented in the same way in all
  sections of the plant
• The detailed movements of the human body are
  consistent each time

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Application Exercise (Optional)

• Examine the ideas and questions in each of the 3
  areas covered within this module (Machine
  Utilization, Work Sequencing, and WIP Stocking
  Strategies)
• Develop a Standardized operation / process
• within your Area, Office or Department and a
  way
• to Audit
• Explore ideas with colleagues
• Implement at least one of the ideas

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The Lean Enterprise

• Standardized Operations/ Standard Work

Lean Foundations Continuous Improvement Training