Five Steps to Lean

1. Define end-customer value for a specific product

specific capabilities
specific price
specific time
2. Identify entire value stream for each product and eliminate waste
product realization
order fulfillment
production
3. Make the remaining value steps flow
no waiting, downtime, scrap within or between steps
continuous flow instead of batch-and-queue
 Five Steps to Lean (continued)

4. Design and provide what the customer wants only when the
customer wants it let the customer pull the product from the value
stream
5. Pursue perfection
by refining definition of value
getting value to flow faster
 Old System for Making
Stretch Wrappers
Storage of Sawing Machining Welding Subassembly
raw
materials

Storage of Storage of parts in process Storage of

finished incoming
goods components

Crating Storage of Touch-up

Painted Final
Frames Assembly

Frame Painting
 Evils of Batch-and-Queue
Increases work-in-process inventory
Hides inefficiencies, lost opportunities
Lengthens replenishment cycle
Creates finished good inventory
Slows customer response time
Risks obsolete products
 New Continuous Flow System

Incoming
materials

Frame painting
Ship
finished
goods
One Cells Continuous Flow

Frame Painting
Sawing Machining Welding

Final assembly work

Testing and Subassembly Subassembly

shipping of roll of control
carriage module
 Old System for Processing Orders

Sales staff Regional Sales Purchasing

Coordinator

Quoting

Order
entry/scheduling Production
Engineering.
Applications MRP master work

schedule orders

Design and BOM

Production
Credit checking expediters
 New Continuous Flow System
for Processing Orders
Order Scheduling
Sales entry/Credit Eng. app.
by product by product
checking

Purchasing
Quick
by product
response
team for
price
quotations
Mfg.
 Old and New Systems for
Developing New Products
Product definition
Marketing Ind. Eng. Purchasing

Engineering Specs
Team Design in concurrent
Leader Development
Mech. Eng. Launch

Elec. Eng
Mech. Eng. Elec. Eng. Mfg. Eng.

Mfg. Eng.

Ind. Eng.
 Outcomes
Number of shipped machines doubled
Produce a machine in half the space
Number of defects fell from 8 per machine to .8
Better understanding of costs
Assigned freed-up workers to Kaikaku team
MRP used only to provide suppliers with long-term
production forecasts
Kanban system used to order parts
S-Series was developed in time of predecessor, of
engineering hours
 Lean Production Principles -
Henderson and Larco
Lean Production

Workplace JIT Six Sigma Empowered Visual Pursuit of

safety, order, Management Perfection
Production Quality Teams
cleanliness
 The Toyota 5S System
Sort - Separate out all items that are unnecessary and
eliminate them complete from the workplace.
Straighten - Arrange all essential items so that that the are
clearly marked and easily accessed, e.g., kanban squares.
Scrub Scrub all machines and the work environment to
maintain immaculate cleanliness
Systematize Make cleaning and organizing a routine
practice as part of the work day
Sustain Sustain commitment to the previous four steps and
provide a constantly improving process
 JIT Production
JIT production means build to customer demand
Single piece flow means there is a maximum of one piece between
each operation
Value-added activities should move along without interruption, and
non-value-added activities eliminated (aided by process-mapping)
Takt time is the drum beat of consumption
All tasks should take about the same time. Rebalance them if demand
fluctuates or workers are absent. Multi-skilled workers facilitate this.
Kanban links customer demand to final assembly, and then to internal
and external suppliers (synchronization)
Changeover time should equal one takt time for final assembly
operations
 Takt Time
If customers order 100 products per day, what is the takt time?
If customers order 80 products per day, what is takt time?
If customers order 120 products per 8 hour shift, what is takt
time?
What if some workers are idle part of the time?
What if some workers build inventory in front of their work
stations?
 Visual Management
Scoreboards, e.g., output compared to goals, sales and
profits to date, quality, inventory turns, training schedules
Kanban cards, kanban squares, shadow boards
Flow through racks
Limited number of rework bays
Color-coded lines, parts
Andon lights