“Helping Manufacturers Succeed”

Lean Manufacturing Overview

with Lego Simulation

Ted Theyerl
NWMOC / CVTC Project Manager
V-Feb 2007
 The National MEP System
United States
Department of
Commerce,
National Institute of Headquarters
Standards and Location
Technology,
State of Wisconsin

Blue = NWMOC Region

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 Economic Development

NWMOC
Promote economic development in Northwest
Wisconsin through retention and growth of the
existing manufacturing base.

“To create and keep good jobs for our clients”

Last year NWMOC’s client companies reported

over $93 million dollars in positive impacts to their
organizations directly attributed to our work with them.
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 Some NWMOC Services

• Strategic Focus
- Business planning
- Performance measures
- People, culture, leadership, work teams
• Operations Improvements – Both Manufacturing and Office
- Value Stream improvements
- Tactical tools such Lean; 5-S, Quick Change-over, Cellular, Pull/Kanban,
• Sales and Marketing Improvements
- 21st Century Lean Marketing System
- Selling to the Government
• Training, Certifications, Resources
- Lean Certificate series; Public and in-house
- Technical College System; Workplace training - standard, custom, on site
- UW-Stout; Technical resources, faculty, class projects, internships

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 Introductions

• Name!

• What you do?

• Why did you come?

• What do you expect to learn?

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 Round 1 Instructions

“Traditional Manufacturing”

1.  Build airplanes with Legos

2.  7 minute round
3.  Follow your instructions.
4.  Do your own job, don’t worry about others – don’t stop.
5.  Batches of 5 – make a batch, move a batch,
make another batch and keep moving.
4.  Station #1 – keep process moving (expensive
equipment)
5.  Quality problems – turn upside down, keep going.
6.  Let me know when first batch of 5 is complete.

Questions?
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 Round One: Debrief

•  Discuss results
•  Discuss the process
•  Relationship to real world

•  List problems that need to be solved on flip chart

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Traditional Manufacturing

“Push System”

»  Large inventories
»  Manufacture in Batches
»  Shortages
»  Delivery delays
»  Overtime
»  Excess equipment
»  Process problems hidden
»  Short on Space

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Why should a business consider a
lean strategy?

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 Mass Production

Material

Pre-fab Fabrication Lay-up

Receiving Shipping
Warehouse Warehouse

Storage

Repair
Sawing Assemble

Ship
Value-Added Time: Minutes
Time in Plant: Weeks
ORDER CASH

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 Rapid Changes in the World – Since About 2000

Shorter Lead More

Times Changeovers

Price set by the

The
Customer Customer More frequent
schedule
changes,
expedites

Smaller Increased
batches competition
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 So… We want to help our country???
Let’s Buy an “American Car” !

• Toyota
- Is manufactured in the USA.
- Has a higher percentage of US-made parts than any other car
made in the USA, or anywhere.

• Chevy Equinox
- Made in Canada
- With a motor made in China

• Chevy Impala – you guessed it, Canada

• Chrysler PT Cruiser - Mexico

Toyota is pushing the in-USA percentage higher.

US auto companies are pushing their percentage lower. 12
 Lean is Market Driven

Customer Demands:

Past Present

Price Set By Manufacturer Price Set By Market

Cost + Profit = Price Price - Cost = Profit

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 It’s All About Time

“The longer an article is in the process of

manufacture,
the greater is its ultimate cost.”

Henry Ford, 1926

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 More about time…

“The average North American-produced vehicle crosses the border

seven times.
During the journey each vehicle faces a staggering 28,200 customs
transactions.
By comparison, cars imported from Europe or Asia involve a single
customs transaction.
If we delay cross-border shipments by just a day, the Americas
lose their proximity advantage over Asia.”

Read into this: If we delay Mike Eskew

UPS Chairman and CEO
Manufacturing Thru-put Time…… July 23, 2007
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 Defining Lean

Lean is:

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 Definitions

• Value Added
Any activity that increases the market form or function
of the product or service. i.e. Chip time, paint time,
touch time. (These are things the customer is willing to
pay for.)

• Business Value Added

Any activity that is necessary to run the business.
Examples: Financial, legal, payroll services, maintenance.

• Non-Value Added
Any activity that does not add market form or function
or is not necessary. (These activities should be
eliminated, simplified, reduced, or integrated.)
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 Lean = Eliminating Waste
Value-Added Non-Value-Added - “The 8 wastes”
1.  Overproduction
2.  Waiting
3.  Transportation
4.  Non-value-added processing
5.  Excess inventory
6.  Defects
7.  Excess motion
8.  Underutilized people
Typically 95% of all manufacturing lead time is non-
value-added.
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 Waste In A Value Stream

Value Stream: Every activity,from Beginning to End

Value Added Activities – Customer is willing to pay for

Total Lead Time

PO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Invoice

Waste Eliminated from the System

Non Value Added Activities – Customer is not

willing to pay for

The downward pressure on price is because the

customer does not want to pay for the “wastes” in
the system.
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 The Value Stream / Lead Time

Value Stream: Every activity,from Beginning to End

Lead Time Affect on Cash Flow

Investing $$ Invoice

12 Wks Lead Time

Traditional

Lean 9 Wks Invested $$ Now Available

3 Wks Lead
Time
Invoice

As Waste is Eliminated from the Value Stream,

the Lead Time is Shortened,
and Invested Dollars Lowered! 20
 How Do I…?

STOP / REDUCE
THE
WASTE

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 Lean Tactical Building Blocks

Continuous Improvement
Pull / Kanban / Equipment
Cellular/Flow
Scheduling Reliability
Quality at Point of Use Quick
Source Storage Changeover
Teams /
Standardized Work Batch Reduction
Culture Value
Stream
5S / Visual Measures Plant Layout Mapping

Foundations of Lean for Office and Manufacturing

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 How to Improve

Utilizing Lean Tools

1.  Create a work cell

2.  Balance the workload – establish takt time
3.  Implement a pull/kanban system
4. Batch size reduction
5. Simple, visual instructions
6. Point of use storage

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 Impact Of Batch Size Reduction
• Batch & Queue Processing
Process Process Process
A B C

10 minutes 10 minutes
10 minutes

Lead Time: 30+ minutes for total order

21+ minutes for first piece

• Continuous Flow Processing

Process Process Process

A B C
12 min. for total order

3 min. for first part

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 Pull System Flow Diagram

Information Flow

Raw Process Process Process Fin. Customer

Supplier Matl A B C Goods

Part Flow
Kanban
Locations

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 Cellular Manufacturing

Linking of manual and machine operations into the

most efficient combination to maximize value-added
content while minimizing waste.

Punch
De-burr
Cut to size

Package Form

Sand

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 Takt Time

Helps us understand the flow patterns and demand rate

of processes that are reasonably repetitive in nature.

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Balance the Process

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 Round Two Preparation

What lean manufacturing techniques can we

use to improve our Lego airplane production?

How can we solve the problems?

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 Typical Results

Lead Time Reduction

Productivity Increase

WIP Reduction

Quality Improvement

Space Utilization

Quick Changeover

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 Where do I Start ??

Value Stream Mapping is key.

–  Current State Map: Create a clear picture of current

material and information flow .

–  Future State Map: Build a future vision of an

improved process through effective use of lean and
value stream mapping strategies.

–  Action planning: Make it happen.

Or…….. Just do something ….. Anything.

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 Sample Value Stream Maps

Current State

Future
State

Thru put: 4 weeks to 3 days Travel Distance: 4,337 feet to 340 feet 32
 Continuous Improvement

Old Adage:

“If you always do what you always did, you’ll

always get what you always got.”

Competitive Corollary:

“If the other guy gets BETTER, you’re gonna

get LESS.”

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 Conclusion - The Journey to Lean

Traditional Lean

•  Complex
•  Simple and visual
•  Forecast driven •  Demand driven
•  Excessive inventory •  Inventory as needed
•  Speed up value-added •  Reduce non-value- added
work
•  Small lot size
•  Batch production
•  Minimal lead time
•  Long lead time
•  Quality built
•  Inspected-in
•  Value stream managers
•  Functional departments

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“Helping Manufacturers Succeed”

Thank You.

If you can do this for

Lego airplanes………...
Think what you can accomplish on a
process you understand and care
about!
 Contact Information

NWMOC Central Office

• Phone Number: (715) 232-2397
• Fax Number: (715) 232-1105
• Web Site: http://nwmoc.uwstout.edu

Ted Theyerl
NWMOC/CVTC – Project Manager
CVTC Gateway Campus
715-874-4658
theyerlt@uwstout.edu

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