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Lean at Wits

Lean at Wits

All models are wrong; some models are useful


(George Box, a likely candidate for the sta>s>cian

of the 20th Century.)

Lean at Wits

World Class Priorities...

s
m
e
t
s
Sy king
n
i
h
T

Lean Thinking
Lean
Operations

Six
Sigma

Supply
Chain

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Process Thinking
DEMING TQC

TQM

SIX SIGMA

AGILE Lean Startup

COLT FORD

TOYOTA

LEAN
TPM

TOC Factory Physics

TAYLOR
MRP

MASS
MRPII

BATCH
ERP
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Different Starting Points


VARIANCE
VOLATILITY
LEAD TIME

DEMING TQC

TQM

SIX SIGMA

AGILE Lean Startup

TOYOTA

LEAN

AVAILABILITY

TPM

BOTTLENECKS

TOC Factory Physics

UTILISATION
P. CONTROL

TAYLOR
MRP

MASS
MRPII

BATCH
ERP
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See The Lean Toolbox, Chronology

Whitney

Taylor

Gilbreth

Ford

Toyoda

Ohno

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Shingo

1950 to 1975
What was Toyota doing?
Ohno?
Shingo?
(See Art of Lean website)
Beware.

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Sea
temperature
is influenced
by currents of
the business
environment

.and by
natural laws
that cannot
be broken
(like
Kingmans
equation)

If these
change, the
Iceberg
melts
irrespective
of tools and
culture!

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The purpose of the Toyota Manufacturing System (or Lean

Manufacturing) was dened by Taiichi Ohno (1988) to be . . . looking


at the ,meline from the moment the customer gives us an order to the
point when we collect the cash. And we are reducing that ,me line by
removing the non-value-added wastes.
Toyota Production System
Time Line

Cash

Order
(reduce by removing non-value added wastes)

A modification ? Idea to Cash

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D.Wayne, 2007. Deming Management


Philosophy and so called Six Sigma Quality.

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D.Wayne, 2007. Deming Management


Philosophy and so called Six Sigma Quality.

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The Adjacent Possible


Darwins Paradox
Ci>es
Prin>ng
Journals and Tim Berners-Lee
Lean futures?
Fortune favours the prepared mind
Adjacent Possible is discussed at length in
Steven Johnson, Where Good Ideas Come From,
Penguin, 2010

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Lean
Wits

Engines
Daimler & Benz

Standardisation
of parts

Bicycles and
Roads

Electric
Motors

Job
Specialisation

Ford and the


Assembly Line

The Loom
Line stop

Innovation and parts


reduction, but then
becoming more rigid

Small batches
Cash
Shortages

Pull &
Kanban

Toyota Production
System

Moving
Line and
Disassembly

Hawthorne
Juran and Deming
Quality and 94/6
People
Strikes but leading
to teams and job
security

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Lean at
Wits

Who was Malcolm McLean?


Who was Billy Durant?

McLean

William Durant
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Lean
Wits

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After Rother
and Liker

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After
Rother and
Liker
Lean
19at
Wits

After
Rother and
Liker
Lean
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Wits

My favourite word is understanding


Dont use consultants. They will bring old ideas. For

breakthrough you need to develop ideas yourself


Humans are addicted to hoarding. This goes back to
the security required by ancient man. But it is a
habit that must be broken, because excessive
inventory is a severe waste
The greatest waste is overproduc>on
Have we forgotten?
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Lean at
Wits

JIT and automa>on. Both are needed equally. But in

the West far more a`en>on has been given to JIT


The two dis>nguishing features of TPS that makes it
dierent from mass produc>on are small lot sizes
and levelling the schedule
Standardiza>on should never get in the way of
crea>ve thinking

Have we forgotten
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Lean at
Wits

Sakichi Toyoda as a great inventor. He developed

may machines by experimenta>on


There are three levels of schedule. The annual plan,
monthly plan, and daily schedule. All must be
capable of change if required. But only if there is
signicant change. Stability is required.
The plant should be like the human body. The
nervous system works automa>cally responding to
changes in the environment without having to refer
to higher level decision making.
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Lean at
Wits

Excessive informa>on must be suppressed.


Computers are useful and fast calcula>on tools, but

should never be allowed to take over decision


making from people. Computers generate huge
volumes of informa>on, much of it unnecessary for
running a plant.
TPS is prot based industrial engineering

?
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First published in 1859


The spirit of self help is the root of all genuine

growth in the individual; and, exhibited in the


lives of many, it cons>tutes the true source of
na>onal vigor and strength
By learning to be more ecient, employees could
improve the quality of their own lives and those
of co-workers. They could also improve the
quality of life for the people who used the
products they made, which were consequently of
more use and value.
The greatest results in life are usually a`ained by
the exercise of ordinary quali>es they who are
the most persistent, and work with the truest
spirit, will usually be the most successful.
It is the only book on display at Sakichi Toyodas
birthplace
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See also
Terence Keely
Sex, Science and Prots

Some Chapters
Self Help - many great mean of humble origins, and self
taught
Leaders and inventors - who learned by doing and
observa>on
The Po`ers - searching for the secrets
Applica>on and perseverance - genius is pa>ence
Helps and opportuni>es - Wa`, Brunel, Newton, Priestly -
observing with intelligence (at gemba)
Ar>sts - wealth not the ruling mo>ve
Energy and courage - the force of purpose, and
promp>tude of ac>on - Wellington, Napoleon, Dr
Livingstone
Men of Business - a`en>on to detail, economy of >me,
accuracy, punctuality - Wordsworth, Shakespeare, Walter
Sco`, Dr Johnson
Money - living within means, frugality, riches no proof of
wealth, independence a`ainable
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Specify what creates value from the

customers perspec>ve
Iden>fy all steps across the whole value
stream
Make those ac>ons that create value
ow
Only make what is pulled by the
customer just-in->me
Strive for perfec,on by con>nually
removing successive layers of waste
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iPad 4 64G US$


1000
800
600
400
200
0

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Source: Ma`hias Holweg and 3 Day Car

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Source: Ma`hias Holweg and 3 Day Car

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Customer

Outbound
Logistics

Marketplace

Vehicle
Manufacturers

Outbound
Transit

Min

Loading &
Despatch

70

Vehicle
Production WIP

Average

Inbound
Logistics

On-site Part
(VM)

First Tier
Suppliers

Inbound Transit

80

Finished
Components

Max

Assembly WIP

90

Pre-Assembly
WIP

In-house built
Parts

Bought-out Parts

Raw Material

Days of Inventory
100
Distribution
& Retail

60

50

40

30

20

10

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Solve my problem

completely
Dont waste my >me
Get me exactly what I want
Provide value where I want it
Solve my problem when I
want
Get me the solu>on I REALLY
WANT
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How do we know what the customers real problem

is?

Drills or holes?
Bed blocking
Customers actual >ming requirements or the salesmans
incen>ve?

Study it, by direct observa>on.


Remember, all Demand is not work

Rework and Failure Demand

Unidirec>onal ow
Goldra`: Throughput and Herbie
Manufacturing and Service
Manufacturing: Internal failure and line stop; external
failure? For some other manager. Measures and
Accoun>ng
Example: OEE : availability or u>liza>on? Quality and
capacity
Service: External failures felt internally

Seddon and Lean in agreement?


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Wits

Customers and Value

System

for Customers and all


Stakeholders
Benet / (Costs + Harm);
Value demand vs Failure
Demand (or Rework)

end-to-end value streams


holis>c, integrated, with
feedback

Process eciency

Flow eciency not


resource eciency
Con>nuous improvement
The big ve opera>ons
concepts
Timing

People

Demings 94 /6
Trust
Mo>va>on and small
wins
The brain and
thinking. Bias.

Innova>on

S curves and the need for


breakthrough

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Customers and Value

System

for Customers and all


Stakeholders
Benet / (Costs + Harm);
Value demand vs Failure
Demand (or Rework)

end-to-end value streams


holis>c, integrated, with
feedback

Process eciency

Flow eciency not


resource eciency
Con>nuous improvement
The big ve opera>ons
concepts
Timing

People

Demings 94 /6
Trust
Mo>va>on and small
wins
The brain and
thinking. Bias.

Innova>on

S curves and the need for


breakthrough

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TRIZ is the Russian acronym for Teoriya Resheniya

Izobreatatelskikh Zadatch

Genrich Altshuler
1926-1998

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Exploration

The whats

Unknown
Unknowns?

Exploitation

The hows

Known
Unknowns?

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Backgrounds:
Increasing risk
Short termism
Discounted cash ow
Vast R&D investments and risk of failure
Mashmallow eect

Health and Safety and Li>ga>on

Failure of Big (IT) Projects

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IT

Design

Factory

Scheduling

People and
Motivation

Projects

Waterfall

Stage
Gates

Big
Transformation
Plans

Optimizatio
n, OR, LP

Change
whole
culture

CPA,
PERT

Agile

Simultaneous
and
Concurrent
Eng

Kaizen
Blitz

MRP, TOC
Batches

Top down
KPIs

Last
Planner

SCRUM

Set Based

Kata

Kanban
Heijunka

Small wins

Lean
Startup
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John Bicheno 2015

41

breakthrough

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(Lord) William Armstrong


Cragside, Northumberland
(Later Vickers-Armstrong,
Later BAe systems)

Efficient Power Collection

The Accumulator
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What happens if:


You insert a mouse?
You insert a burning candle?

Why do this?
What is needed
to do this?

You insert a mint plant?


You insert a burning candle,
then later a mint plant,
Then after a month, a mouse?
Reference: Steven Johnson, The Invention of Air,
Riverhead, 2008

What are the


implications?

Joseph Priestley
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Customer
performance
expecta>ons

Products
are good
enough

Beat competitors
with functionality
and reliability

Beat competitors
with speed,
responsiveness and
convenience

Products
are not
good
enough
Time

time

Following
Clayton Christensen
The Innovators
Solution
HBS Press, 2003

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Clayton Christensen video

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Wits

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Customers and Value

System

for Customers and all


Stakeholders
Benet / (Costs + Harm);
Value demand vs Failure
Demand (or Rework)

end-to-end value streams


holis>c, integrated, with
feedback

Process eciency

Flow eciency not


resource eciency
Con>nuous improvement
The big ve opera>ons
concepts
Timing

People

Demings 94 /6
Trust
Mo>va>on and small
wins
The brain and
thinking. Bias.

Innova>on

S curves and the need for


breakthrough

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Ford was both the most brilliant and the most

senseless marketer in American history. He was


senseless because he refused to give the customer
anything but a black car. He was brilliant because he
fashioned a production system designed to fit market
needs. We habitually celebrate him for the wrong
reason: for his production genius. His real genius was
marketing. We think he was able to cut his selling price
and therefore sell millions of $500 cars because his
invention of the assembly line had reduced the costs.
Actually, he invented the assembly line because he had
concluded that at $500 he could sell millions of cars.
Mass production was the result, not the cause, of his
low prices.

Theodore Levitt, Marketing Myopia,


Harvard Business Review, July / Aug 1960
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Quality
Flexibility
Service
Costs
Response Times
Variability
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High
Satisfaction
Delighted

Quality or
performance
not achieved

delighter

Absent

High quality
performance
Neutral

Fully Implemented
must be

more is better

Low
Satisfaction

enragers

Disgusted
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Performance and Cost


Human Fit (Ergonomics)
Craftsmanship
Emotional Appeal
Elegance and Sophistication
Symbolism and Cultural Values
Global Fit (Environment)

From James L Adams, Good Products, Bad Products, McGraw Hill, 2012

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The customer, and the supply chain!

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Customers and Value

System

for Customers and all


Stakeholders
Benet / (Costs + Harm);
Value demand vs Failure
Demand (or Rework)

end-to-end value streams


holis>c, integrated, with
feedback

Process eciency

Flow eciency not


resource eciency
Con>nuous improvement
The big ve opera>ons
concepts
Timing

People

Demings 94 /6
Trust
Mo>va>on and small
wins
The brain and
thinking. Bias.

Innova>on

S curves and the need for


breakthrough

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Seeking not to be reduc>onist. Wholes not Parts


Understanding about rela>onships and

interdependencies
Engaging in mul>ple perspec>ves
Reec>ng on the boundaries
Learning

(These are closely linked concepts)


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Purpose
Doing the right thing and doing things right (Acko)
The Whole greater than the sum of the parts
The Systems Approach seeks not be to reduc>onist (Checkland)
Interconnec>ons: Silos and Streams
System boundary

Subop>misa>on
Feedback
CATWOE

Clients, Actors, Transforma>on, Weltanschauung, Owners, Environment

Vic>ms and Beneciaries


Viewpoints (Tops, Middles, Bo`oms, Customers)
The Systems Approach begins when you rst see the world through the
eyes of another (Churchman)
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Tavistock Institute
(Univ of London)

Ackoff

Kurt Lewin

Complexity
Interaction

Fred Emery
Systems Thinking (1969)
Self directed teams
Socio Tech Design

Not the technical system alone


(like Taylor)
But interactions between
Technical systems (plural)
and
Social systems (plural)

Eric Trist
Job Enrichment
Job Enlargement
Job Rotation
Work Design

Open Systems Movement

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If we dont
understand the
Customer we are
likely to not do
something, or not
do it right
resulting in failure
demand, rework
and complaints.
All cost money.

If we dont
understand the
Customer we are
in danger of
doing more than
is necessary OR
assume that
things are
important that are
not (e.g.: Flowers
and
Chocolate)This
costs money.

What Matters?
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Common Causes and Special Causes


Treat a special cause as common cause and you
will make the system worse
Treat a common cause as special cause and you
will make the system worse
97% of defects are common cause problems inherent
to the system (W. Edwards Deming)
Or The righter you do the wrong thing, the wronger
you become (Russell Ackoff)
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Learning to See HB as a System


I want to claim
34%V 66%F

64% passed back


Manage queues

Hand out forms


Take in documents

22%V 78%F

Multiple Sorts & Checks


Cases fragmented
Scanning/Indexing errors

44%V 56%F

Handoff

Sort
Scan
Index

HO

Workers activity managed


1-10 cycles to clean (ave.4)
95% cases over-specified
20% docs. duplicated

Letters unclear

Allocate
99% claims dirty
No case ownership
CTax fragmentation

HO

Decide

0-152 days to pay


3% visit once

Pay

HO

Notify

HO

Inspect

HO

60% errors
Rework
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External Influences
IT Systems

Budgets

Repair request info


Budget commitment

Repair
received

Schedule labour
and material

Contractor

receives job
Hand off

Policy & Procedure


Repair info
carried out

Operative
receives job

Hand off

Functional Specialisation

Obtain
materials

Hand off

Attend repair
Hand off

W/o completion info.


& customer satisfaction

Works order
processed

Hand off

Cost of works
completed

Invoice
received

Hand off

Invoice
paid
Hand off

Wrong office

No w/o issued

Overbooking

Wrong or no part

Post inspection

Invoice match fail

10% in CS

2 - 3%

3%

50 - 80%

Up to 4 week delay

1 - 2 p.m.

Not on
Contract
20 p.a.

No contact
for Cat E
20 - 25%.

V.O.
authorisation
30 - 40%

Wrong
Contractor
1 - 2%

Order part and


re-book

Further works
required

10%

20%

Wrong
trade

Wrong
address

No
access

Lack of
time

Inaccurate
contact details

1%

50 - 100 p.a.

15 - 20%

2%

30%

Hold payment as
job incomplete

Invoice without
V.O.

1 - 2%

5 - 10%

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Returns

Age of
Inventory

Changes
to the
Schedule

Shortages
of some
SKUs

Bigger
Batches
Demand for
Higher
Utilization
Reduced
Maintenance

Earlier
Orders

Increased
Order
Book

Pressure on
Capacity

More
breakdowns

See Industrial Dynamics


Forrerster, MIT, 1960s 1970s

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Customers and Value

System

for Customers and all


Stakeholders
Benet / (Costs + Harm);
Value demand vs Failure
Demand (or Rework)

end-to-end value streams


holis>c, integrated, with
feedback

Process eciency

Flow eciency not


resource eciency
Con>nuous improvement
The big ve opera>ons
concepts
Timing

People

Demings 94 /6
Trust
Mo>va>on and small
wins
The brain and
thinking. Bias.

Innova>on

S curves and the need for


breakthrough

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Adjusts

Expedites

Measures

Repairs

Sets up

Approves

Files

Monitors

Requests

Updates

Assigns

Identifies

Moves

Returns

Verifies

Changes

Inspects

Receives

Reviews

Waits for

Copies

Labels

Reconciles

Revises

Distributes

Maintains

Records

Selects

William E. Trischler; Understanding and Applying Value-Added Assessment

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Waste of Human Poten>al


Not bringing your brain to work

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Waste of energy and natural resources


Becoming the most important waste of all?

Hunter Lovins
see Hawkin, Lovins, Lovins, Natural Capitalism, Li`le Brown, 1999

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How many of the wastes are pure waste, and how

many are tradeo wastes?

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I spent most of my money on women, booze and


gambling.

the rest I wasted.

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Transport
Inventory
Mo>on
Wai>ng
Overproduc>on
Overprocessing
Defects
Employees
Green


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Wits

From Lifescan
Scotland

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The Seven Green Wastes

Energy
Water
Materials
Garbage
Transport
Emissions
Biodiversity (impact on surrounding area wildlife, birds,
bugs, plants and trees, water table)

Do VSMs with the data boxes containing these wastes


Document Input / Output
Set up kaizens and A3s for countermeasures for each

type

Reference: Brett Wills,


Lean at Wits
Green Intentions, CRC Press, 2010

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Appropriate work shall be


specied as to content,
sequence, gg, & outcome
Standardisa>on in detail,
xing a seat
Every customer-supplier
connec>on must be direct, &
there must be one
unambiguous way to send
requests & receive responses
Immediate requests for
assistance, solving
within takt
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The pathway for every product & service must be simple & direct
One specic route means con>nuous experimenta>on
Any improvement must be made in accordance with the scien>c
method, under the guidance of a teacher, at the lowest possible level
in the organisa>on
Predict & test improvements

Toyota South Africa Story


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The Management was sa>sed, even delighted


But Lionel Aldworth was not!
Not so much what was achieved, but HOW it was

achieved
Using (mental?) models to surface your knowledge
deciencies
PDCA is Win, Win
Puwng in place a Learning System, not just solving
problems, or making savings
If you want to understand TPS then you must rst
understand the scien>c method and thinking behind
the system (Dr. Shingo)
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These three steps must go in a circle instead of in a

straight line, . . . It may be helpful to think of the


three steps in the mass produc,on process as steps
in the scien,c method. In this sense, specica,on,
produc,on, and inspec,on correspond respec,vely
to making a hypothesis, carrying out an experiment,
and tes,ng the hypothesis. The three steps
cons,tute a dynamic scien,c process of acquiring
knowledge

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Lesson 1: Theres no subs>tute for direct observa>on.


Lesson 2: Proposed changes should always be structured as

experiments. Seeking to fully understand the problem and


solu>on, even ques>oning if a solu>on is more successful
than projected.
Lesson 3: Workers and managers should experiment as
frequently as possible. As condence grows experiments will
change from single factor / single machine issues to look at
linking processes and sub-systems.
Lesson 4: Managers should coach, not x.

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The US Nuclear Submarine Propulsion Program and

the Soviet Nuclear submarine Fleet


Columbias fatal mission
Alcoa

Steven Spear
Chasing the Rabbit
McGraw Hill, 2009

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Spears 4 Capabili>es
1. Capturing the best collec>ve knowledge and making

problems visible
2. Building knowledge by swarming and solving
problems
3. Spreading lessons learned to the whole organiza>on
4. Leading by developing capabili>es 1, 2, and 3 in
others.

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While doing supplier

development with Toyota early in my research, I was challenged


to "stop thinking and start doing." Why? My mentors saw I was
trying to solve problems by shear thought. The diculty was that
the whole reason I had the problem in the rst place was because
I didn't know enough to get something to run well. More thinking
trapped me in a loop of not knowing enough but thinking more so
not doing anything.
The subtle elegance of their approach was that by doing
something, even quick, cheap, and non-intrusive, I might have
that extra cycle of learning to discover the answer.
In today's markets, no one knows enough to make great calls
consistently. Those who will emerge less scathed are those who
recognize that what they currently know is inadequate, so they
will start discovering and developing others to discover with
relentless ferocity.
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Kingmans equa>on
Li`les Law
Three Types of Buer
Inventory Fill Rate Curve

Inventory

Queue

Time

Utilization

Entities =
Entities/Time x Time

Capacity

Inventory $

Pull

Fill Rate

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Report when a project is half


The Tortoise and the Hare (Ohno)
Financial games: build up or run

down at end of year or month


KPI >ming
Design: take longer but do be`er?
Orders: End of month hockey
s>ck?
Inventory and Capacity: Chase vs
Level
Delays in communica>on, and
mapping
Religious holidays; industry fairs

complete.
Dierences in perceived >me (by
situa>on, by customer, by culture)
Repor>ng periods (too fast or too
slow?)
MRP net change
New Manager?
End of quarter repor>ng?
Car registra>on periods
Is there a rst mover advantage ?
Necessity: Falklands ships
PARKINSON!

See Stuart Albert When ;and Frank Partnow Wait

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Kingmans equa>on
Li`les Law
Three Types of Buer
Inventory Fill Rate Curve

Inventory

Queue

Time

Utilization

Entities =
Entities/Time x Time

Capacity

Inventory $

Pull

Fill Rate

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Whenever there is varia>on, someone or

something will wait

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Because they aect..


..
..

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leadtime

High uncertainty

Moderate
variation
Some uncertainty
Zero variation
30%

Utilisation

100%
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Muda - waste - non value added


Muri - overburden - pushing a machine, person, or

process beyond natural limits. (See also Factory


Physics).
Mura - unevenness varia>on, non steady ow;
interrup>ons, instability, unnatural work
Mura and Muri are ozen the cause of Muda
Muri South Africa
Style
Dont worry, be happy

Load affects
Speed!

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L = (C2a + C2e)/2 x ( / (1- )) x te + te



MURA

MURI

Ave Process Leadtime

C2a is arrival variance; C2e is process variance


is u>liza>on (load / capacity or arrival rate / service rate)


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The Highway
What do highway engineers do?
Op>mal throughput: speed and density

The importance of rework and failure demand


Sensi>vity: u>liza>on and varia>on. Above and below

= 0.5
When is six sigma worthwhile?
Arrivals at bo`leneck
Rework, load, and the Goldra`s Herbie
CV is standard devia>on / >me: Implica>ons
The order: Muri, Mura, Muda (NOT Muda, Mura, Muri!)
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The broader and deeper meanings behind them are:



Muri - Dicult to Do (See, Hear, Reach, Understand, Teach, Develop, Find, Develop, Manage, etc,
etc., etc.), Beyond Current Capacity or Capability, Physical, Mental, Psychological Overburden or
Unreasonableness, No Reason or Principle

Mura - Fluctua>ons, Varia>on, Interrup>ons, Instability, Inequality or Unnatural work

Muda - Non Value Added, Not Needed

Organiza>ons that are truly people / par>cipa>on focused will also understand that the order
must be Muri, Mura and lastly Muda. First iden>fy and start elimina>ng or reducing the dicult
and frustra>ng and you can think about how to get people involved. Some things you may want
to also classify as Mura or Muda will also be eliminated.
Mura is not about measuring varia>on on graphs, it is about seeing varia>on as it happens.
Eliminate or reduce Instability, Unpredictability and Interrup>ons and you also impact the psyche
of the Team involved. Muda will also be eliminated.

The key skill is not to know specic tools to get rid of the 3 Mu's, but to develop and prac>ce
seeing and recognizing them in all or specic parts of processes, systems or organiza>ons.

From Erik Hager, TPS Network, Linkedin

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Parkinsons
Law?

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Arrival Variation

Load

Value
+
Demand

Failure
Demand

Utilization =
Capacity

Base Capacity

Waste

Process Variation

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Customer

Server
System

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External : Hard
To
Control
Arrival Variation
Variation

and

Common Cause
and
Special Cause

Capacity
Process Variation
Internal: May be
Easier to Control
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Lean (?)

production
feasible

Utilisation

not
feasible

100%

leadtime

leadtime

Traditional

Utilisation

100%
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B Seasonal Demand
Demand

Demand

A Steady Demand

Time

Time
D Low Variation Demand
Demand

Demand

C High Variation Demand

Time

Time

From Garry Hencher, MSc Dissertation, 2011

From Kevin Duggan, Creating Mixed Model Value Streams,


Productivity, 2002

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Frances Frei, in Harvard Business Review, describes ve types of customer-


introduced variability:
arrival variability (the >me between arrivals),
request variability (within arrivals),
capability variability (customer skill)
eort variability (how much eort has the customer made say before
airport security)
subjec>ve preference variability (dierent customer expecta>ons).

from Frances Frei, The Four Things a Service Business must get right
Harvard Business Review, April 2008

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0.18
System 1

0.16

Densities

0.14
0.12

Lead Time System 1 = 14 days

0.10
System 2

0.08
0.06

Lead Time System 2 = 23 days

0.04
0.02

10

12

14

16 18 20 22
Cycle time (days)

24

26

28

30

32

34

36

38

Both systems have an average lead time of 10 days


But for a 90% service level, System 1 must quote 14 days, System 2 23 days

From Wallace Hopp, Supply Chain Science

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Varia>on is much more important where there is high u>liza>on, but is

rela>vely unimportant where there is low u>liza>on. If you are at the


low u>liza>on end, Six Sigma projects aimed at varia>on reduc>on could
be a waste of >me and money! (But not, of course, is defects are the
issue)
U>liza>on generally has more inuence on queues (lead >me) than
varia>on. (U>liza>on has geometric inuence!)
Reducing process varia>on is not enough! Arrival varia>on may be more
signicant
Never compromise failure demand by a`empts to reduce varia>on.

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The coecient of varia>on (C in the formula) is / t

Where is the standard devia>on of the process >me


Where t is the average process >me
It is not absolute varia>on () that is important, but the ra>o.
So
Varia>on is much more important in short cycle opera>ons (typically
volume manufacturing) than long cycle opera>ons (many types of
service and administra>on)
Where opera>on >mes are long, it is MUCH more important to get it
right rst >me than to focus on reducing varia>on.

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Constraint iden>ca>on should take both varia>on and u>liza>on into

account.
Red has longer average cycle >me and is therefore likely to be the
constraint, but blue has greater varia>on.

Cycle time: Which is the


Constraint?
Protec>ng the constraint with a >me buer is a tradeo decision

If inventory is very expensive, a permanent buer may not be a great


idea
Would the loss in throughput compensate for the cost of inventory?
A buer is a queue that aects lead >me: is this worth it?
The resource upstream of the constraint determines the arrival varia>on
at the constraint. (See the linking spreadsheet.)
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OEE
All factors the same?
MTTR and MTBF

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Kingmans equa>on
Li`les Law
Three Types of Buer
Inventory Fill Rate Curve

Inventory

Queue

Time

Utilization

Entities =
Entities/Time x Time

Capacity

Inventory $

Pull

Fill Rate

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It may be li`le but it is the law (Wally Hopp)


Robust!
Applies widely
Inventory and throughput
Hospitals and health
Service
Design

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Entities = entities / day x days

(so, patients = patients / day x days )

OR
WIP = WIP / day x days

OR

(so, inventory (e.g. jobs) = jobs / day x days )


WIP

Throughput TH =
Cycle Time

Cycle Time =

WIP
Throughput

OR

weeks =

units
units / week

Littles Law is completely general, but


Applies to the long-term steady-state, average, not to the short term
The process must be stable (e.g. no ramp up in production rate)
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Consider a single machine over 20

Throughput: 4 jobs in 20 hours;

hours, doing 4 jobs: A, B, C, D

Job

Arrives at (hr)

Takes (hrs)

15

10

TH=4/20 = 1/5 jobs per hour


Cycle Hme: A is 4 hours in system; B
is 7;C is 8; D is 5; Total 24 hours;
average is 24/4 = 6 hrs
Average WIP = 24/20 = 6/5
LiPles Law: WIP = TH x CT or 6/5 =
1/5 x 6

11

12

A A A A B B B B C C C

13

14

15

16

17

18

19

20

D D D D D
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Parcel Co has a throughput of 1400 parcels per day

and a lead->me of 34 days. They state that their


total WIP across the process is 30k parcels. Is this
plausible?
A manager claims that her inventory turns three
>mes per year. She also states that everything the
company buys gets processed and leaves within six
weeks. Is this consistent?

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WIP = Throughput x Cycle >me = 1400 x 34 =

47600


But they claim WIP is 30 K

so it is inconsistent!

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Another way, by Littles Law


Throughput

Inventory Turns =

WIP

3 / year = once every 52 / 3 = 17 weeks


Against 6 weeks claimed

WIP

Cycle time =

Throughput
1
Cycle time

So, inconsistent!

Throughput
WIP

1
c.f.

3 per year

6 weeks
52 per year
c.f. 3 per year
6

See Slow and W

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Throughput: the rate at which en>>es are processed e.g.

pa>ents / day
WIP: the number of en>>es in the system e.g. pa>ents
Cycle >me: average >me taken end-to-end, including
rework e.g. days
(Hence en>>es = en>>es per >me x >me)
(e.g.400 pa>ents in a hospital = 40 discharged per day x
10 day stay)
Capacity = base capacity detractors (or as Ohno said,
(actual) work + waste)
U>liza>on = rate / capacity ( or load / capacity)
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Kingmans equa>on
Li`les Law
Three Types of Buer
Inventory Fill Rate Curve

Inventory

Queue

Time

Utilization

Entities =
Entities/Time x Time

Capacity

Inventory $

Pull

Fill Rate

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Inventory
or
Variation

Is
Buffered
by

Capacity
or

And
in no
other
way

Capacity
Time

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122

Kingmans equa>on
Li`les Law
Three Types of Buer
Inventory Fill Rate Curve

Inventory

Queue

Time

Utilization

Entities =
Entities/Time x Time

Capacity

Inventory $

Pull

Fill Rate

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Kingmans equa>on
Li`les Law
Three Types of Buer
Inventory Fill Rate Curve

Inventory

Queue

Time

Utilization

Entities =
Entities/Time x Time

Capacity

Inventory $

Pull

Fill Rate

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Is not just Kanban


A pull system is one in which work is released based on

the status of the system and thereby places an inherent


limit on WIP (Hopp and Spearman)
Mul>-stage pull (DBR, CONWIP)
Does not have to be linked with the customer (Note
Womack and Jones wrong interpreta>on?)
The Lean Startup (Eric Reis)
Lean Design
Pulling in Labour as needed (Tesco)
Pulling in manager help (Andon, Seddon)
Training as needed (TWI)
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5S
As much to do with the mind as
with the physical situaHon

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TWI is a System!

JI

JR

JM

JS
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127

Quotes
To my amazement, the program that Toyota was going to

great expense to transfer to NUMMI, was exactly that which


the Americans had taught the Japanese decades
before (Shook)
You will not become Lean by doing TWI, but you will not
become Lean without doing TWI (Huntzinger)

Quoted in
Jim Huntzinger,TWI Case Study: Ohnos
Vehicle to TPS, TWI Summit, 2008

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Jim Huntzinger The Roots of Lean

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Job Breakdown

A key tool used for this is the job breakdown sheet (refer to Figure). Not to be confused with a standard
work combinaHon sheet that focus on labour allocaHon, sequencing & balancing tasks, a job breakdown
sheet is a training aid that ensures the criHcal knowledge of a job is transferred to the trainee creaHng a
stable repeatable outcome.

Percentage
Importance
of
total
work
15-20%
Critical work must be highly
consistent.
60%
Important work must be consistent
within a slightly wider range
20%
Low Importance work method may
be variable

Effect on work

Definite effect on the results if


performed out of range.
Probable effect on results if
performed out of range.
Not likely to affect results regardless
of method.

After Liker & Meier, Toyota Talent, 2007, p 144

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Comparing Approaches
TWI
Step

Charles
Allen

Scientific
Method

Prepare

Observation
&
Description

Present

Formulation
&
Hypothesis

Application

Use
Hypothesis
to Predict

Testing

Test
Prediction
by
Experiment

Shewart
Or
Deming

Kaizen

Job
Instruction

Job
Method

Job
Relations

Plan

Observe &
time the
process

Prepare

Breakdown

Get the
facts

Do

Analyse
the current
process

Present

Question

Weigh &
Decide

Check
Or Study

Implement
ant test the
new
process

Try out

Develop

Take action

Act

Document
the new
standard

Follow
up

Apply

Check
results

Adapted from Huntzinger, 2006

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From Suzanne Nuttall, MSc Dissertation 2011 / 2012

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TWI Effectiveness (from Dinero, p4-5)

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Standards and SOPS

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Standards
To standardise a method is to choose out of many methods the
best one, and use it. What is the best way to do a thing? It is
the sum of all the good ways we have discovered up to the
present. It, therefore becomes the standard.
Todays standardisaHon is the necessary foundaHon on which
tomorrows improvement will be based. If you think of
standardisaHon as the best we know today, but which is to
be improved tomorrow - you get somewhere. But if you think
of standards as conning, then progress stops.




Henry Ford, Today and Tomorrow, 1926

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Standards - another quote


In a Western company the standard operaHon is the property
of management or the engineering department. In a Japanese
company it is the property of the people doing the job. They
prepare it, work to it, and are responsible for improving it.
Contrary to Taylors teaching, the Japanese combine thinking
and doing, and thus achieve a high level of involvement and
commitment.


Peter Wickens, 1995

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& from Ohno


A proper (standard) procedure cannot be wriPen from a desk.
It must be tried & revised many Hmes in the producHon plant.
Furthermore, it must be a procedure that anybody can
understand on sight
For producHon people to be able to write a standard work sheet
that others can understand, they must be convinced of its
importance.

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Standard Work & Work Standards


Standard Work relies mostly on the eorts of shop

oor teams to develop standards.

Work Standards are developed by sta specialists &

engineers - usually with no involvement from the


shop oor - & are imposed standards.

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Purpose of a Standard
Make it easier for people to do a job
Avoid known pikalls
Assure safe operaHons
Make it easier to teach new employees
Make it easier to track down the cause of a problem
Reduce unnecessary variaHon

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Standardisation and Management

Top
Middle
Supervisor
Operator

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140

Standardised Work Procedure


Is not a set of rules
Should not be confused with safety standards,

health standards, BS, etc.


Is not xed in stone
But
Is the current best known way to do a job safely
and easily
It documents know-how
Allows measurement and improvement
WriPen by operators for operators
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Standards: Characteristics
Use verb plus noun - or picture
One moHon, one step
Kept at the point of use
Comparing actual to standard uncovers waste or

problems; a problem is a deviaHon from standard


If there are no changes to SOPs there has been no
improvement

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Misunderstanding Standards

From
Mike Rother

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Holding the Gains?

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Examples of Standards
FootprinHng
Painted levels of min & max inventory
Sample board


SOP (3 types - see later)
One-point lessons
ProducHon control board
Checklist
Equipment operaHon
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Managerial Standards
AdministraHve rules

Equipment checks

Personnel guidelines

Quality assurance (ISO

Budgets
Delivery schedules
Project plans

9000)
Reference samples
Safety instrucHons

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Window Analysis
Party X

Practised

Unknown

Un-Practised

Unknown

Un-Practised

Known

Practised

Party Y

Known

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Visuality: How Visual Can Change


Behaviour (1)

What do you see?


How does this change behaviour for
Students, bus driver, car drivers?
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Visuality: How Visual Can Change


Behaviour (2)
Stage 1
Stage 2

Stage 3

What does this


do to reduce
waste?

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Visuality

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Visuality: A vital part of Lean!


5S
Schedule
TPM
Leader Standard Work
Inventory
Defects

Exercise:
Not just information
But
What behaviours would
you like to change?

B/neck status
Ideas
.
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Careful.

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Visual Management

Viagra HQ
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Mapping

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Five Stage Mapping


1. Top Level Preliminary Analysis and PrioriHzaHon
2. High level Current State Value Stream Analysis
3. Future State: Layout and Detailed Scheduling
4. ExecuHon and Control
5. ImplementaHon of the AcHon Plan
For rst Hme around, go straight to Step 2

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155

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

The opera>ons sequence,


Informa>on ows
Physical ows and layout (Spaghew)
A nancial map
A map of zones of responsibility
Time line, Pareto and postponement
Inventory investment and Fill rate curve
Demand prole: repea>ng, non repea>ng, plateaus
Amplica>on Map
Demand Categories
Part and Component Usage.
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Basic Mapping Tools (1)

PRESS

SHIP

I
500 parts
1 day

SPAGHETTI
DIAGRAM

C/T = 10 sec
C/O = 30min
3 shifts
2% scrap

1000 parts
2 days

LEARNING TO SEE:
CURRENT STATE
PROCESS STEPS
INFORMATION FLOWS

C/T = 2 sec
C/O = nil
1 shift
0% scrap

Blank

Press

C/T = 3 sec
C/O = 15min
2 shifts
1% scrap

Welding

Press

BLANK

Daily Schedules DAILY

Press

Supplier Monthly
orders
WEEKLY Weekly
Schedule

Forecast
PRODN
CONTROL
Customer
MRP
Daily Call

Store
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Basic Mapping Tools (2)


Steel delivery

AMPLIFICATION
MAP
Quantity

press
assby

orders

Inventory $

Time (days)

Fill Rate

INVENTORY INVESTMENT /
FILL RATE CURVE

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Production
Control
MPS - MRP

Daily requirements
Supplier 1

Supplier 2

Daily
requirements

Daily requirements
Customer

Daily Production
Schedules

Daily
Shipments

210k
Daily
Shipments

Daily
Shipments

85k

35k

Manager
Responsibility
Zones

95k

Value Stream
Financing

W/house

Press

Assemble 1
10K

105k
12k/day

RM: 16 days

16K

Assemble 2
30K

40k
8k/day

WIP: 32 days

Payment terms - 30 days

Weld 1

7k/day

70k

15k
4k/day

FGI: 8 days

Ship

Weld 2

4k/day

Credit granted: 30 days

Lean at Wits
Operation financing: 28 days

160

Mapping and Transformation


Stage 1 (Top Level A3)(Value Streams not decided as yet)
ContribuHon analysis
Demand prole repeaHng and non-repeaHng orders
Demand prole arrival variaHon
Demand plateaus
Target uHlizaHon policy
Shipment frequency and aPainment
LiPles Law for overall lead Hme
Delivery achievement
Outline physical process map
AmplicaHon Map
Inventory Investment and Fill rate curve
Supply chain analysis?
People Issues?
Priori>es?
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Mapping and Transformation (2)


Stage 2 (Level 2 A3)
Break down into value streams
Map the current state : Sequence
Map the current state: InformaHon
Map the current state: Physical layout and spagheu
Map the current state: Financial
Map the current state: Zones of responsibility
Lead Hme: Time line, Pareto, Postponement
Buers and Scheduling Points
Priori>es?
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Mapping and Transformation (3a)


Stage 3: Future State: Layout and Detailed Scheduling
Waste Reduction and Layout
Waste ReducHon
7 Classic wastes
Changeover reducHon
Ergonomics
Visuality

Layout
CreaHvity and the physical
process

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Layout Opportunities for Future State?


Change the sequence?
Choose the right duraHons for each step slower or

faster?
Create a new sequence to minimise risk or maximise
exibility a parallel line ? redundancy?
Change the locaHon of a machine, a sequence, a
supermarket, a facility ?
Skip a step or join two steps ?
Giving customers choice discounts for early orders,
or regular orders, or standard products?
Adapted from Stuart Albert, When, Jossey Bass, 2013

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164

Mapping and Transformation (3b)


Stage 3: Future State: Layout and Detailed Scheduling
Scheduling
Batch sizing and Resource
Scheduling

Value Streams

Batch sizing
Constraints and buer
locaHons
Supermarket sizing
EPEI calculaHons
Pull and scheduling system to
be used

plus, Linking the Loops and the Pacemaker

Buer sizing for make to


order and to stock
Takt and cycle Hmes
Mixed model schedules
CONWIP and kanban loops
Supermarket sizing
EPEI calculaHons
Line balance

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Mapping and Transformation (3c)


Stage 3: Future State: Layout and Detailed Scheduling
The Future Organisation.
Skill shorkalls?
Alignment between value
streams and organisaHon
structure
KPIs
Role of managers?

The Financials

Inventory reducHon

impact?
Cash ow?
Standard cosHng?
Plain English accounts?

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Mapping and Transformation (4)


Stage 4 : ExecuHon and Control
Visual management
CommunicaHons board design
KPIs
Day by hour schedules
Day by hour problem highlight
Feedback

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Mapping and Transformation (5)


ImplementaHon Plan: Internal
ImplementaHon Plan: External

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Mapping and Transformation

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169

A Different sort of Value Stream


Map

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Top Level Scheduling 1

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Moments of
Truth:
SAB Miller
India

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Defects and Problems


Man
Variation

Mistakes

Complexity

Machine

Tool wear;
Training
Experience Vibration

Omission;
Dropped
parts
Individual
differences;
motivation

Material
Material
variation

Method

Information

Execution
methods

Gage
Accuracy

Incorrect
Setup;
Software
errors

Wrong
material
or part

Wrong
method

Wrong
Instructions;
Misreads

Difficult
setup

Difficult
to work
or assemble

Difficult
method

Verbose;
Interpretation

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Toyota Kata
What is a Kata?
How does this relate to the Human brain?
What is a Target CondiHon?
What is not a Target CondiHon?
What do we assume about geung to the target

condiHon?

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Kata from Rother


Not
Daily management + improvement
But
Daily management = improvement
Target and Target CondiHon
Target is an outcome
Target condiHon is a descripHon of a process
operaHng in a way required to achieve the outcome
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Kata: The Five Questions


1. What is the target condiHon?
2. What is the actual condiHon now?
3. What obstacles are prevenHng us from reaching the

target condiHon?
4. What is the next step?

And, how can we test this step or idea as quickly as


possible? An experiment?

5. When can we go see what we have learned in

taking the step?

Reect on what actually happened


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176

Target Condition
Without a target condiHon we could have lots of ideas:
Reduce setup Hme
A long list! As from a VSM
But what to do first?
Introduce kanban
Confusing? Demotivating?
Set up a cell
A target condiHon could be what is prevenHng us from a

MTTR less than 5 minutes?. This could lead to the next


acHon e.g. improve signaling system
A target condiHon should not be too trivial or too dicult
Note the similariHes with Maurer, Amabile, Expectancy
Theory
Then another small step. RepeHHon. Coaching
So moHvaHon! (and Tools are used to develop people!)
From Mike Rother, Toyota Kata,
McGraw Hill, 2010

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Two Types of Kata:


(1) Improvement
Establish the target condiHon (note: a target is an outcome; a

target condiHon is a descripHon of a process operaHng in a


way required to achieve the desired outcome)
Without a target condiHon: we could reduce setup Hme, start %s, apply kanban,
With a target condiHon: What is prevenHng us from compleHng a part every 2 minutes?

The NEXT target condiHon. Step by step. Not the nal (see

next slide)

Examples of NOT a target condiHon implement (vague),apply (countermeasure),


minimise (vague, must be related to a point in Hme), reduce (an outcome)

It is PDCA; rapid experimentaHon, not the workers fault.


The Five QuesHons

What is the target condiHon?


What is the actual condiHon now?
What obstacles are prevenHng you from reaching the target condiHon?
What is your next step?
When can we go see what you have learned from taking the step?

See Mike Rother, Toyota Kata, McGraw Hill


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The problem path


The
Current
Condition

The
next
step

The
Target
Condition

The way through the grey zone is unclear; but get started, dont debate
The torch analogy (You can only see so far)
The Heuristic (Keep climbing)
Predict and Lean (like PDSA and Steve Spear)
Establish the small next step (not threatening); not the ideal (too difficult!)
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Tools and Kata


Not
I have a toolbox so let me look for areas
where I can apply them or I know about 5S
so let us apply that
But
I have a target condiHon, so let me nd an
appropriate tool to use
So
(For me) not a quesHon of Toolheads or not,
but how tools are selected and used
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Two Types of Kata:


(2) Coaching Kata
Philosophy
If a problem occurs, Do it now! (Why?)
Who should learn and follow up ? (The team leader, not the worker who
does not have the Hme; so smaller span)
The mentor, mentee dialog
A3 problem solving
if the worker hasnt learned the instructor hasnt taught
it takes two to A3
Toyota 8 step methodology: a way to focus and clarify the specic (small)
problem by dialog

Dene, break down into chunks, i/d root cause, set next target, select soluHon from
several alternaHves, implement, check, adjust and standardise

Go and see together (not report back); show me


Focus on understanding, not the countermeasure
Focus on the process, not the people
Fact based, test and see
See Mike Rother, Toyota Kata,
McGraw Hill

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Learner or Knower?

From Flinchbaugh (2013)

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182

After Action Reviews


US Army
Do it immediately, every Hme; NOT an evaluaHon or a criHque!
The four steps are:
1. ObjecHve. What did we set out to do? (What was planned?)
2. Reality: What actually happened? (Note: this is not judgmental or

an evaluaHon. It is simply the facts about what happened at each


stage of the game or project.)
3. Learning: Why did it happen that way? What went right and
wrong. What did not meet expectaHons. What went well? Again,
sHck to the facts. It should not be personal. No blame. This is a
learning step so ask what caused the results to turn out the way
they did.
4. Next Hme. What should be changed next Hme: planning,
processes, behaviours. What should be kept
Senge on why this is the best, but o}en fails

See detailed description in
Lean at Wits
David Garvin, Leaning in Action, HBS Press, 1999, pp 106-116

183

A3 Problem Solving
Issue

Target Condition

Background
Countermeasures
Current Condition
Implementation Plan
what

who

when

outcome

Problem Analysis
Why?
Why?
Why?

Cost
Test

Cost / Benefit
To customer
To organization

Follow up

Stamps

Lean at Wits

184

Through the
eyes of the
customer

A3 Problem Solving
(this is PDCA!)

Issue

Sketch or
Future state
VSM

Target Condition

Background
Current Condition

Sketch or
Current state
VSM

Countermeasures

Now;
Soon

Implementation Plan
what

Problem Analysis
Why?
Why?
Why?

who

when

predicted
outcome

Study cost,
Implementation cost

Run diagram,
Fishbone,
5 why

Cost
Test

Note both

Cost / Benefit
To customer
To organization

Follow up

How to move towards


The ideal state

Stamps

Lean at Wits

All who have seen


185

Lean at Wits

186

Lean at Wits

187

A3 and Rapid Response at Lifescan,


Scotland

Lean at Wits

188

Improvement Types

Lean at Wits

189

Standardisation and Management


Top
Middle
Supervisor
Operator
Point Kaizen means establishing new standards
Lean at Wits

190

Kaizen: One Small Step at a


Time :Why?

Lean at Wits

191

Kaizen: One Small Step at a


Time :Why?

Non threatening
Immediate
Leads to habit
Builds condence
Linked with ritual
Empowers sta
Less fear of failure
Reduce stress (How do you eat an elephant?)
Encourages experimentaHon (The drunk, his lost item,
and the streetlamp)
Lean at Wits

192

Kaizen, Small Steps and the Brain


Large Goal > fear > access to cortex restricted > failure

Small Goal > fear bypassed > cortex engaged > success
Three
Stages
of brain

Reference: Robert Maurer, One Small Step Can Change Your Life:
The Kaizen Way, Workman, 2004

Lean at Wits

193

Small Steps: Maurer Suggests


Ask liPle quesHons
Set small goals (Take one less bite at the chocolate; Not 5S

but one minute per day to Hdy)


Solve small problems
Learn to see small opportuniHes and rouHne (What colour
car is parked..)
An org structure that makes small ideas easy to implement
Learn to anHcipate (Deming, Spear)
Break down big problems into small ones
Small ideas repeated have bePer retenHon (Think exams!)
Dont keep problems to yourself. Encourage discussion
Reference: Robert Maurer, One Small Step
Can Change Your Life: The Kaizen Way, Workman, 2004

Lean at Wits

194

Rewards and Small Steps


Why are suggesHon schemes, in general
A failure in the West?
A success in Japan?

Lean at Wits

195

Pokayoke
For Six Sigma perfecHon, standards and SPC may not

be enough
You can have high process capability, but sHll fail due
to mistakes
hence
100% automaHc inspecHon together with warning or
stop

Lean at Wits

196

Absolutely Excellent Web Site on


Pokayoke!

http://www.campbell.berry.edu/faculty/jgrout/pokayoke.shtml

Lean at Wits

197

Everyday Pokayokes

Lean at Wits

198

Suggest a Pokayoke

Truck jammed

Smoke detector that


Is not working

Lean at Wits

199

Implementing Pokayoke
Product
Simplify
Product 1
simplif

MistakeAssmby
Proof simplif

Process Tools & Equipt


Process
flow

Process
exec

ConvertUse
repair
adjustment
to settings

Process
control

Control
Variation

SPC
Six Sigma

Simple
equipmt
Mistake
proof
equipment
Fixture
setup

The priority in
applying quality
paradigms
should proceed
from top to
bottom and right
to left in the order
shown
Martin Hinckley
Make No Mistake!
Productivity, 2001

Lean at Wits

200

Another pokayoke

These men have just finished installing poles to prevent cars parking on the sidewalk
Lean at Wits

201

Why are Manhole Covers round?

Lean at Wits

202

.and Checklists
Boeing B17

TWI

20
Lean at Wits
3

Checklists

Lean at Wits

204

Pokayoke Methods and Examples


Control
Contact

Parking height bars


Armrests on seats

Fixed Value

French fry scoop


Pre-dosed medication

Motion Step

Airline lavatory doors

Warning
Staff mirrors
Shop entrance bell
Trays with
indentations
Spellcheckers
Beepers on ATMs

from : Richard Chase and Douglas Stewart, Mistake Proofing


Based on Shigeo Shingo
Lean at Wits

205

Pokayoke Cycles
LiPle pokayoke
Immediate detecHon and stop or warning
Short term prevenHon
Big pokayoke
Geung a}er the root cause of the problem
A
P
Long term prevenHon and problem solving
Accumulate the evidence
C
A P D
C D
Lean at Wits

206

Pokayoke References
Shigeo Shingo, Zero Quality Control: Source

InspecAon and the Pokayoke System, ProducHvity,


1983
Nikkan Kogyo (ed), Poke-Yoke, ProducHvity, 1989
Web site by John Grout (excellent)
See Quality 75
C. MarHn Hinckley, Make No Mistake!, ProducHvity,

2001

Lean at Wits

207

Ideas?

Your
Experience?

Lean at Wits

208

Idea Management..

Lifescan,
Scotland

Ideas are evaluated by shop floor operators across all 3 shifts

Lean at Wits

209

Idea Management..

Lifescan,
Scotland

Lean at Wits

210

Idea Management..

Lifescan,
Scotland

Implemented ideas. (Now shown on Touchscreen TV)

Lean at Wits

211

TPM

Lean at Wits

212

Nothing said about schedule a`ainment


Changeover!
Cost factors
Reducing OEE (& esp changeover at great cost may not be worthwhile
OEE is in terms of >me, not cost - for example, quality may be minor wrt
OEE, but a major cost

Do not measure OEE plant wide


Use a control chart, for common & special causes
A boast like we have improved OEE by 20% should be

treated with cau>on

Overproducing? Bo`leneck? Appropriate? Bigger batches?

Lean at Wits

213

OEE is best used for shop oor problem

iden>ca>on, but less good when used as a


top-down imposed measure
No such thing as world-class OEE - depends
on industry (in process industry 85% is poor)
Loca>on of the bo`leneck - downstream
more cri>cal because higher part value
Is .9 x .7 x .9 same as .7 x .9 x .9 ? (depends
on policy advantage)
Lean at Wits

214

Availability

X
OEE

Speed

X
Quality

Lean at Wits
215

Availability

Utilization

X
OEE

Speed

X
Quality

Lean at Wits
216

MTBF
Availability

X
OEE

=
MTTR + MTBF

Speed

X
Quality

Lean at Wits
217

Machine

MTTF (hr)

MTTR (hr)

Defect %

OEE %

90

10

10

81%

10

81%

85

15

81%

8.5

1.5

81%

Lean at Wits

218

Availability

X
OEE

Speed

Productivity

Quality

Lean at Wits
219

Case A: Quality = 80%; availability and speed both

100%
Case B: Availability is 80%; quality and speed both
100%
OEE is the same in both cases: 80%
Output is the same in both cases: 80% of poten>al
BUT
Inputs (e.g. Raw Material) is dierent
So, Produc>vity (Output / Input) is dierent!
Lean at Wits

220

After Teresa Hayes


MSc Lean, 2013

Lean at Wits

221

Lean at Wits

222

Lean Layout

Lean at Wits

223

PRODUCT LAYOUT

PROCESS LAYOUT

DescripHon

SequenHal arrangement of
machines

FuncHonal grouping of
machines

Type of Process

ConHnuous, mass producHon


mainly assembly

IntermiPent, job shop batch


producHon, mainly
fabricaHon

Product

Standardized made to stock


Varied made to order

Demand

Stable

FluctuaHng

Volume

High

Low

Equipment

Special purpose

General purpose

Workers

Limited skills

Varied skills

Lean at Wits

224

PRODUCT LAYOUT

PROCESS LAYOUT

Inventory

Low in-process high nished


goods

High in-process low nished


goods

Storage space

Small

Large

10 Material handling

Fixed path (conveyor)

Variable path (forkli})

11 Aisles

Narrow

Wide

12 Scheduling

Part of balancing

Dynamic

13 Layout decision

Line balancing

Machine locaHon

14 Goal

Equalize work at each staHon

Minimize material handling


cost

15 Advantage

Eciency

Flexibility

Lean at Wits

225

project

Process

job shop
batch
cell
line
flow
one off

low repetitive
volume

high
continuous
volume
flow
Lean at Wits

226

Process

project
job shop

CPA+ Lean
APS + Lean
Lean + MRP?

cell

Lean

line

LP/MP

flow
one off

low repetitive high


continuous
volume
volume
flow
Lean at Wits

227

project
job shop

Process

Professional
Services
(a la carte, corporate lending)

Service
Shops

cell

(Pizza Hut, Personal banking)

Mass
Services

line

(McD, Subway, ATMs)

flow
one off

low repetitive
volume

high
continuous
volume
flow
Lean at Wits

228

project

variety demands

job shop

Process

market
cost
demands
demands

cell

cost
demands

line
flow
one off

low repetitive
volume

high
continuous
volume
flow
Lean at Wits

229

Loca>on
Plant Layout
Cell Layout
Worksta>on Layout

Lean at Wits

230

Loca>on
Plant Layout
Cell Layout
Worksta>on Layout

Lean at Wits

231

The very big picture


Map the external ows
Focus
The Great Nuclear Fizzle at old B&W

Lean at Wits

232

To support an organisa>ons vision


Safety, comfort, convenience and job sa>sfac>on

for employees
Eec>ve u>lisa>on of equipment and resources to
facilitate the manufacturing process
Flexibility of opera>on and ease of maintenance
Minimising capital expenditure & maximising ROI
Minimise material handling and make economical
use of the building/site space
(Adapted from Apple 1977 and Tompkins et al. 1996)

Lean at Wits

233

The 8 factors that inuence


layout:
Material
Machinery
Man

The need for a facility layout study can


arise under a variety of circumstances...
1.

2.

Movement
3.

Wai>ng
Service
Buildings
Change
(Taken from Muther 1955)

4.

Changes in the design of exis>ng


product, the elimina>on of products
from the product line, and the
introduc>on of new products.
Changes in the processing sequences for
exis>ng products, replacements of
exis>ng processing equipment, and
changes in the use of general-purpose
and special-purpose equipment.
Changes in produc>on quan>>es and
associated produc>on schedules,
resul>ng in the need for capacity
changes.
Changes in the organiza>onal structure
as well as changes in management
philosophies concerning produc>on
strategies...
(Tompkins et al 1996, p. 307)
Uniq Evercreech current reality
Lean at Wits

234

The General Hospital


Vs
Sholdice Hospital, Toronto

Lean at Wits

235

100%
Reorganise ?
Go Lean !!!
Contri
bution

Invest ?
Provided they
are future
products

Cut ?
Ranked Products

But how similar is this profile to the next.


Lean at Wits

236

Ranked
contribution
per
bottleneck
minute

Note these!
You dont want to be making
products which make low
contribution, and which tie up
precious bottleneck capacity!

Ranked Products
Lean at Wits

237

Loca>on
Plant Layout
Cell Layout
Worksta>on Layout

Lean at Wits

238

Background

Systema>c Layout Planning


Pa`ern
*

Richard Muther began to develop the

SLP process in the 1950s; it has


con>nued to evolve and can be
found as the base framework for
many other layout approaches (e.g.
Moore 1962, Apple 1977, Tompkins
et al. 1996, )
SLP is a scien>c approach to layout
and involves:

A clear statement of the problem or


task
Facts that can be measured
Restatement or reclarica>on of the
task in light of the facts
An objec>ve analysis, leading to a
decision
Ac,on for approval and installa>on
Follow-up or check
(Muther 1955, p. 143)

Lean at Wits

239

Richard Muther & Associates


2005

Uniq Evercreech is to receive an addi>onal 35 Skus during 2012 as its M&S desserts
business is transferred from its Shropshire site;
Evercreech has an integrated Manufacturing, Innova>on and People strategy, which
it aims to deliver between 2010 and 2013 these involve an innova>on-led, exible
opera>on with engaged people as its key lever to drive change;
The acquisi>on of Uniq by Greencore in 2011 has led to an increased focus on results
delivery as well as the approval of capex to make building changes.
Lean at Wits

240

Rule of thumb:

Maximum area - around 200,000 square z; 20,000 sq m


Maximum people - 500
Maximum SKUs - 2,000
For fab / assembly - cut all numbers by 4 (except steel, auto, etc.)

Why ?

Internal ows become too complex


Access to central areas - even with mul> docks
People cease to feel like a family
Loss of focus
Management structures too complex, too remote
Examples: Nypro, 3M, HP, Solectron, Celes>ca - Telford, mi`lestand
After Richard Schonberger, Lets Fix It!

Lean at Wits

241

Shape

Rectangular 60:40 oers many op>ons


Long and narrow, very few op>ons
Square may not oer enough side-to-side distances for
some, too much for others
Flow Pa`erns

Good

Less Good

After Richard Schonberger


Lean at Wits

242

Not end-to-end, but mul>-dock around the outside


For exibility
Dell demolishing a two year old plant to create

mul>-access. 50% of outside walls are receiving and


shipping docks - for 5 inventory turns a day
(Tom Peters, AME, 2001) and Ford, Wixom MI (one of the
most protable in world)

After Richard Schonberger, Lets Fix It!

Lean at Wits

243

Collect the opinions of the par>cipants


Summarise onto the REL chart using AEIOUX
Ac>vity Arrangement diagram - eyeball method
Space rela>onship diagram - wng the rela>ve

loca>ons into the available space


Physical model and discussion

Lean at Wits

244

A Absolutely necessary
E Essen>al
I

Important
O Ordinary
U Unimportant
X Must not be located together
Make the diagram cooler!

Lean at Wits

245

Production
Offices
Stockroom
Shipping and Receiving
Locker Room
Toolroom

O
U
A
U

A
O
U
O

I
X
O

Lean at Wits

246

Lean at Wits

247

Lean at Wits

248

RELATIONSHIP CHART

Date

Engineering Department

12

Main Parking Area

O
4

U
_

U
_

4
O
4

O
4

6
I
3
O
4

A
3
O
4

I
4
O
4

9
I
2
O
4

E
5
U
_

U
_

Ordinary
Closeness OK

22

Unimportant

11

O
4

Not desirable

N x (N-1)
2

T otal =

0
66

19

E
2

A
3

I
3

O
4

U
_

O
4

13

11

O
4

O
3

O
4

O
4

U
_

E
2

I
5

"Closeness"
Rating

Important

Rest Room/Canteen

O
4

O
4

O
2

E
2

I
1

U
_

10

O
4

I
2

A
1

O
4

I
5

Reasons in code
(below)

20

Innovation Centre

O
2

E
1

E
6

A
6

17

O
4

A
1

A
6

I
2

14

18

Packaging Store

A
1

Especially
Important

15

U
_

16

Dairy

I
2

N o. of
Ratings

14

A
1

I
2

A
6

I
2

CLOSENESS
Absolutely
Necessary

12

Business Unit 'B' Production

A
1

A
6

E
1

Importance of
relationship (top)

13

Warehouse & Distribution

A
1

A
6

I
2

10

Business Unit 'A' Production

A
6

Value

Changing Rooms

U
_

O
6

This block shows relation


between "1" and "3"

Planning, Purchasing &


Technical Offices

E
5

of

SLP_CH_2012

Offices (inc. HR & Finance)

With n/a
Sheet

Jan-12

Referenc e

Projec t Site Layout: Module 3

Uniq Evercreech (Greencore)

Carolyn Hobdey

13




Format taken from
Richard Muther &
Associates .
Colour Key taken from
A. G. Raymond &
Company.

Charted by

Plant (Company)

6
7

14

8
9

15

10
11

16

12
13

17

14
15

18

16
17

19

18
19

20

20

RICHARD MUTHER & ASSOCIATES - 130

Reasons
behind the
"Closeness"
Value

Code
1

REASON
Flow of material

Management communication

Internal service delivery

Convenience

Financial control

Food safety/legislative requirements

7
8
9

Lean at Wits

249

Bad

Be`er


Much Be`er

Lean at Wits

250

Bad (conveyor)
S>ll Bad (forkliz)
Much Be`er (tugger)
Best (hand trolley)

Lean at Wits

251

Material handling spine


Communica>on / people spine
Services grid
Flexible cell areas
Local receiving docks
E.g.
HP Corvallis
Printer Plant

Lean at Wits

252

Lean at Wits

253

1. Flow line is cut up


- large buffer
capacity between
2. The system
capacity
is high
3. Autonomous
Complete
Process

Toyota Motomachi plant and


Toyota Tahara plant

240 meter

Training space

Paint shop
T1

C1

T2

C3

F1

F2

80 meter

Inspection

C2

Final Testing

Lean at Wits

254

Lozy ceiling makes large one-touch inventory

lineside buers (and clear oors) possible


Large inter-segment buers (up to 15 cars); 8
segments
Rela>vely long distance between cars (5 6 m)
High system capacity / low assembly density
Operators can use double the regular cycle >me
without disturbing colleagues

Lean at Wits

255

Lean at Wits

256

Lean at Wits

257

Lean at Wits

258

This self regula>ng, near op>mal, system can be used wherever operators are

cross trained to do all jobs (or most jobs) in a cell or line.


Method: Operators walk upstream un>l they meet another operator, then they
work downstream un>l either they meet another operator or they reach the end
of the line. Then repeat.
Star>ng o: n operators occupy the rst n posi>ons in a line. Operator 1 passes
work to operator 2 and so on un>l the last operator. The last operator progresses
work through all following worksta>ons un>l the end of the line. Then walks back
to operator 2 (who is by then working further downstream). Then revert to step
2.
This method is useful for mixed model, for frequent breaks, for automa>c
coverage, etc. Very robust and exible.
Arranging workers from slowest (at the start) to fastest is shown to be best.
This method originated at Seiki Sewn products (a Toyota subsidiary)
See Bartholdi and Eisenstein, A Produc>on Line that Balances Itself, Opera,ons
Research, v44, n1, 22-34, 1996
Lean at Wits

259

Lean at Wits

260

Simulation

Production
Plan

Resource
Plan

Master
Production
Schedule

Rough Cut
Capacity
Evaluation

Material
Requirements
Planning

Capacity
Requirements
Plan

Purchasing

Input/Output
Control
(Shop Floor
Lean at Wits
Control)

Accounting
Detailed
Scheduling

261

Simulation

Accounting

Production
Plan

Resource
Plan

Master
Production
Schedule

Rough Cut
Capacity
Evaluation

Material
Requirements
Planning
plan only

Purchasing

Capacity
Requirements
Plan

Detailed
Scheduling

Input/Output
Control
(Shop
Floor
Lean at
Wits
Control)

262

Resource
Plan
Production
Plan

Improvement
Targets

Rough Cut
Capacity
Evaluation
Master
Production
Schedule
Material
Requirements
Forecast

Purchasing
Advance
Warning

Detailed
Daily
Schedules

Mixed
Model
Sequence

Shop Floor
Cell Capacity
Planning

Central
Cell

Detailed
Scheduling,
and Execution
including
Kanban
operations
Heijunka
and
Lean
at Wits
call
off

263

MPS
forecast
forecast

MRP

advisory

advisory
kanban

Supplier

kanban

Press
Shop

Assembly

Mixed
Model or
Heijunka

call off

Dispatch

Customer

Supermarket
Lean at Wits

264

Lean (?)

production
feasible

Utilisation

not
feasible

100%

leadtime

leadtime

Traditional

Utilisation

100%
Lean at Wits

265

Definition (Push and Pull):


A pull system is one in which work is released
based on the status of the system and thereby
places inherent limit on WIP.
A push system is one in which work is released
without consideration of system status and hence
does not inherently limit WIP.

Lean at Wits

266

Iden>fy the system constraint

the part of the system that cons>tutes its weakest link can be either physical or
a policy

Decide how to exploit the constraint

obtain as much capability as possible from a constraining component, without


undergoing expensive changes or upgrades
e.g. eliminate down>me at bo`leneck

Subordinate everything else

adjust non-constraint sewngs to enable constraint to operate at maximum


eciency

Elevate the constraint


take whatever ac>on necessary to eliminate the constraint
only if step 2 and 3 not successful

Return to step 1 - avoid iner>a!


Lean at Wits

267

Drum: constraint, works to customer demand


Buer: located in front of drum to keep it working at

maximum output
Rope: drum is roped to release point, work is pulled through
system
Synchronised with demand
Constant tuning of policy buers ensures minimum
inventory
Is TOC disguised pull system?

Lean at Wits

268

Backlog Rope
GYR

2
Constraint Rope

GYR

Lean at Wits

269

1. Eliminate obvious waste


n Scrap, rework, poor layout, excessive changeovers
2. Swop Buers
n Swop inventory buers for capacity buers: by working
more hours at key resources, in fact all the tac>cs in The
Goal
3. Reduce Variability
n Six Sigma, Standard Work, 5S
4. Con>nuously improve
n Kaizen ac>vi>es; TOC 5 steps
Lean at Wits

270

1. Schedule your plant at 100% of capacity


2. Start working. Variability happens.
3. Cycle >mes increase, WIP piles up, delivery dates

are missed
4. Add capacity (over>me? subcontract?), or reduce
the number of jobs in the plant
5. Things get back under control.
6. So you go go back to step 1

Lean at Wits

271

Varia>on is much more important where there is high

u>liza>on, but is rela>vely unimportant where there is


low u>liza>on. If you are at the low u>liza>on end, Six
Sigma projects aimed at varia>on reduc>on could be a
waste of >me and money!
U>liza>on generally has more inuence on queues
(lead >me) than varia>on.
Reducing process varia>on is not enough! Arrival
varia>on may be more signicant
Never compromise failure demand by a`empts to
reduce varia>on.
Lean at Wits

272

The coecient of varia>on (C in the formula) is / t


Where is the standard devia>on of the process >me
Where t is the average process >me

It is not absolute varia>on () that is important, but the

ra>o.
So
Varia>on is much more important in short cycle
opera>ons (typically volume manufacturing) than long
cycle opera>ons (many types of service and
administra>on)
Where opera>on >mes are long, it is MUCH more
important to get it right rst >me than to focus on
reducing varia>on.
Lean at Wits

273

Excess Inventory
Excess Inventory

Variabilty Reduction

Excess
Capacity
Excess
Capacity

Delay
Time

Delay
Time

From Wallace Hopp, Supply Chain Science

Lean at Wits

274

Constraint iden>ca>on should take both varia>on

and u>liza>on into account.

Which is the
Constraint?

Protec>ng the constraint with a >me buer is a

tradeo decision

The resource upstream of the constraint

determines the arrival varia>on at the constraint.


Lean at Wits

275

Eight Building Blocks


Ten Lean Scheduling Concepts
See Lean Toolbox 4th edi>on

Lean at Wits

276

A is a bottleneck or pacemaker,
B is a non-bottleneck
A

Where to place buffer inventory ?

Lean at Wits

277

A is a bottleneck or pacemaker,
B is a non-bottleneck

Where to place buffer inventory ?

Lean at Wits

278

A is a bottleneck (or pacemaker),


B,C are non-bottlenecks
A

Where to place buffer inventory ?


Lean at Wits

279

X
X

Assembly

Constraint

Work
station

Buffer

Example from
Tomlinson, TPMI
Lean at Wits

280

A requires relatively long changeover, B has short or nil c/o


B
A

C
D

Where to place a supermarket ?


How does A know what to work on ?
Lean at Wits

281

A is a bottleneck (or pacemaker),


B,C are non-bottlenecks
B

C
How much inventory in front of A ?
Other questions? (from B, from C, from both?)
Lean at Wits

282

A, B, C, D are sequential operations

What is the first question to ask ?


What determines the location of supermarkets?
Lean at Wits

283

A, B and C all
have
Changeovers

C
A is a bottleneck, so needs to be protected by inventory
What are other considerations?
Lean at Wits

284

For example, a bottling plant:

A is a
bottleneck
B and C are
Nonbottlenecks
The three are
joined by
conveyors

What are the buffer considerations along the


Two sections of power conveyor?
Lean at Wits

285

Demand Smoothing
Reference:
Takt and Pitch
The New Lean Toolbox
Pages 103 - 120
ONE Pacemaker
Supermarkets and FIFO Lanes
Runners, Repeaters, Strangers
Mixed Model Scheduling
Pull and Kanban
Smaller Batch Sizes and EPE
Regular Material Handling Route (Runner)
Levelling and Heijunka Authorisa>on
Lean at Wits

286

Iden>fy the most constrained machines or processes


List the products that go through the process, their weekly

demand and their unit cycle >mes.


Calculate the sum of (weekly demand x cycle >mes)
Divide by available working >me per week.
Where this ra>o is >1, more than 1 machine or over>me is
needed.
Where the ra>o is above approx 0.8 take care (remember
queuing theory and dice game!).

Lean at Wits

287

Quality
and never pass on
a defect, even if it
means waiting

Perfect
quality

Zero tolerance of
defects
Very strict, receiving,
requirements

and never cause


amplification

Smoothed
demand

buffer

Demand

Occasional longer
customer waits (but
note some customers
dont mind waiting)

Lean at Wits

288

Net available production time per day


Takt time =

Required production quantity per day

Net available time is total time less planned downtime

Pitch time = Takt time x

Container quantity

Container quantity could be the final packing quantity


or the container move quantity. Often human movable
Lean at Wits

289

Helps avoid
Unsynchronised opera>ons
Amplica>on
Data processing schedule and inventory
inaccuracies

Lean at Wits

290

Reference:
Lean Lexicon,
LEI

Lean at Wits

291

If a subsequent opera>on has a changeover (or inspec>on)

but shorter cycle, calculate the number required to catch up


If the next opera>on has a longer cycle >me, or inspec>on,
takt >me should govern - but a short FIFO lane could be
appropriate to allow the previous opera>on longer
breathing space.

Lean at Wits

292

Runners : dedicate facili>es; may be worth doing irrespec>ve

of volume for >me compe>tors


Repeaters : build the schedule around them; give them regular
slots; make as ozen as possible
repeaters are by regularity, not volume
two types : high frequency - put them into regular slots; and
low frequency - use priority kanban
Strangers : t them around repeaters; batch size may be
determined by order quan>ty, but transfer quan>ty may dier

Lean at Wits

293

Product
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Grand Total Frequency Freq Type Culm % Culm Useage
12008CABLE ASSY, 3/D/2362, ISS 6
9 12 11
9
9
9 11 14 10 14
6
114
11 Runner
9.53%
114
12020CABLE ASSY, 3/D/2492 ISS 3
13
8
4
8
9 11
8
8
5 10
7
91
11 Runner
17.14%
205
12057CABLE ASSY RDS KEYPAC ISS 2
11
8 14 11 10
8
5
5
5 10
87
10 Runner
24.41%
292
12077CABLE TAMPER LEAD ISS 2
2
3
7
6
8
8
4
9
9
7
9
72
11 Runner
30.43%
364
205XFMR (E/K1000), ISSUE 11
6
6
8
4
5
4
4
5
4
5
4
55
11 Runner
35.03%
419
12091Cable Assembly, Earth Lead, PAC202 ISSUE 11
1
5
2
6
7
3
8
4
6
4
47
11 Runner
38.96%
466
218XFMR (11226), ASSEM,ISSUE 14
4
3
4
5
4
4
4
3
4
3
3
41
11 Runner
42.39%
507
12087Cable Assembly, GSM Modem, EK1000/2200 6
5
4
2
2
3
3
6
1
4
4
40
11 Runner
45.74%
547
176XFMR,COIL, STANDARD RDR,ISSUE4
6
3
3
2
4
4
3
4
3
4
2
38
11 Runner
48.91%
585
12110Cable Assembly, E/K Printer 4/E/2431 Issue 0 3
3
8
3
2
4
2
3
4
3
35
10 Runner
51.84%
620
164XFMR,UNIVERSAL COIL
1
3
6
3
6
6
2
1
3
31
9 Runner
54.43%
651
12078Cable Battery Lead PAC 2200 Issue 2
1
2
5
4
2
2
3
4
3
3
1
30
11 Runner
56.94%
681
235Transformer, 240/16.5V 3/D/1947 issue 2
1
3
1
4
3
3
1
2
3
1
4
26
11 Runner
59.11%
707
12076Cable SWB To SWB PAC 2284 Issue 2
1
1
4
3
1
2
3
3
2
2
1
23
11 Runner
61.04%
730
12518Cable Assembly, PC Reader Issue 1
2
12090Cable Assembly, 3/E/2727 Issue B
2
12085Cable Assembly, Micro Reader, 4/E/2714/iss0
12051Cable Assembly, 4/E/2511 Issue 2
1
216XFMR (19401), ASSEM,ISUE 14
1
12029CABLE ASSY, 3/E/0350 ISS 3
2
168AFMRAIRCOIL, EKEY, MKII,ISSUE3
12028CABLE ASSY, 3/E/0350 ISS 3
1
12112COIL CABLE, 4/D/2512 ISS 1
175XFMR, COIL, PAC-KEY SLIMLINE RD
12518Cable Assembly PC Reader Issue 1
1863Cable Assy PSU To NTWK Cont Issue 4
12517E/K Battery Leads - Issue 1
179XFMR COIL,L/P RDR,ISSUE 7
1
1870Cable Assembly, Earth Lead Assembly D7112-X01 161XFMR COIL,FF 4000,ISSUE 5
1
12519Cable Assembly, PC Reader Cable 6 Core
1
203XFMR Reader (19256), Issue 14

1
1
1
1
1

2
1
2
1
1
1
2
1

Issue 1
2

1
1

1
1

1
1

3
1

1
1
1
1

1
1
1
1
1
1

1
1
1
1
1

1
1
1
1
1

1
1

1
1
1
1

1
2

1
1
1
1
1
1

1
1
1

1
1

1
2
1
1
1
1
1
1
2
1
1

1
1

2
1

1
1
2

1
1

1
1

11
10
9
8
8
8
8
7
7
7
6
5
4
4
4
4
3
3

7
8
5
8
8
7
7
7
7
7
4
5
4
4
4
3
3
3

Died
Runner
Repeater
Runner
Runner
Runner
Repeater
Runner
Repeater
Runner
Runner
Repeater
Repeater
Stranger
Stranger
Stranger
Stranger
Stranger

87.37%
88.21%
88.96%
89.63%
90.30%
90.97%
91.64%
92.22%
92.81%
93.39%
93.90%
94.31%
94.65%
94.98%
95.32%
95.65%
95.90%
96.15%

1045
1055
1064
1072
1080
1088
1096
1103
1110
1117
1123
1128
1132
1136
1140
1144
1147
1150

Lean at Wits
Example from Tomlinson, TPMI

294

Runners

Repeaters

Strangers

tight
kanban

tight kanban
MRP ?

MRP

tight
kanban

loose
kanban

MRP ?

2 bin

2 bin

2 bin
MRP ?

Lean at Wits

295

Runners
Short L/T

Tight kanban

Long L/T

Kanban + SS

Kanban
MRP

Kanban

Kanban

2 bin

Kanban + SS

MRP

MRP

VMI

2 bin

Long L/T

Short L/T

Kanban

Strangers

MRP

Short L/T

Repeaters

Long L/T

VMI

2 bin + SS

2 bin + SS

2 bin + SS

Lean at Wits

296

Lean at Wits

297

Lean at Wits

298

Conver>ng Strangers into Repeaters


Design and G.T.
Product line ra>onalisa>on
Working lower down in the BOM
Changeover / Batch size reduc>on
Thinking Heijunka (work slots)
Conver>ng Repeaters into Runners
As above, plus
Crea>ng cells
Choosing machines or capacity rather than inventory
Lean at Wits

299

Why is ABCABCABC be`er than

AAABBBCCC ?
Uniform material ow
Balance
Reduced inventory
In FGI
In WIP

Lean at Wits

300

Dont make anything until it is needed,


and then make it very quickly.
Womack and Jones
The thing to do is to keep everything
in motion, and take the work to the man
and not the man to the work.
Henry Ford, Today and Tomorrow, 1926
Lean at Wits

301

Withdrawal (Move) kanban


From nished good supermarket to shipping
Authorise movement
May be ini>ated by Heijunka slots

Produc>on kanban
At workcentres, to authorise produc>on
Indicate parts to be replenished to a nished goods
supermarket

Signal kanban
Authorise batch produc>on. Ozen triangles
Tell how many units have been pulled from the supermarket

Lean at Wits

302

Kanban

Move or
withdrawal

Production

Signal /
Triangle

Production
card

In plant

Adapted from Suzaki


The New Manufacturing Challenge
Free Press

Supplier

Lean at Wits

303

Material
movements

Kanban
movements

Op 1

Op 2

Op 3

Adapted from Bonvik, web.mit.edu

Lean at Wits

304

Material
movements

Kanban
movements
red or blue

Op 1

red or blue

Op 2

red or blue

Op 3

Pulling a red leads to replacement of red


Pulling a blue leads to replacement of blue

Adapted from
Bonvik, web.mit.edu

Lean at Wits

305

Kanban
movements

Op 1

Op 2

Material
movements

Op 3

Pulling a red leads to replacement of red


Pulling a blue leads to replacement of blue, etc
BUT with many products, WIP becomes excessive
SO..

Adapted from Bonvik,


web.mit.edu

Lean at Wits

306

Kanban
movements

Op 1

Op 2

Material
movements

Op 3

So, Card indicates a replacement, but what to make


comes from the Schedule at gateway workcentre
Other workcentres work on a FIFO basis

Adapted from Bonvik,


web.mit.edu

Lean at Wits

307

Material
movements

Kanban
movements

Op 1

Op 2

Op 3

Adapted from Bonvik, web.mit.edu

Lean at Wits

308

Lean at Wits

309

Lean at Wits

310

Product based and Capacity based


Squares
Single card
Dual card
Priority
Heijunka board (10 minute capacity)
Other signals

Why
all
these?

golf ball, faxban, e-ban


CONWIP and POLCA

Lean at Wits

311

Number of kanbans =

Daily demand x (EPE frequency + Lead time) + Safety stock


Container size

Lean at Wits

312

Number of kanbans =

The replenishment
interval from sending
the signal to receipt

Daily demand x (EPE frequency + Lead time) + Safety Stock


Container size
EPE is given
in days
(see EPE
section)

This is a variable,
used to adjust the
no of kanbans to a
feasible replenishment interval

Used to
compensate for
process uncertainties
& demand variation
Lean at Wits

313

Dont forget to review kanban quan>>es

periodically
Especially when demand, lead >me, or supplier
performance changes
This is where a computer system can be useful - to
track signicant changes and give warnings.

Lean at Wits

314

No of batches x changeover >me = constant


Maximum number of changeovers

= (total >me - >me for produc>on)



internal setup >me
but note if total external setup >me is longer than prodn and maint >me,
this is the deciding factor
Changeover >me + (batch x cycle) = (batch x takt)
gives target changeover and min. batch
Minimum batch = Weekly demand / max changeovers

Lean at Wits

315

Start with the available >me per day (allowing for rou>ne

main, OEE)
Subtract the total required run >me per day to give >me
available for changeover
Maximum changeovers per day = >me available / average
changeover >me
Distribute the maximum changeovers per day between all
the parts. More changeovers for A parts (perhaps more than
1 per day), less changeovers for C parts (perhaps less than
one per day).
Leave a li`le slack >me.


Lean at Wits

316

8 hour net working day; 6 products with daily

demand (in produc>on >me) 2, 1, 1, 1, 0.5, 0.5


hours (total 6) per day; changeover >me = 1 hour
1 day EPE not feasible
2 day EPE not feasible
3 day EPE just feasible (over>me reqd?)
4 day EPE OK; can run A twice
5 day EPE OK; can run A every day (just)

Lean at Wits

317

Available >me per day = 7 x 60

mins = 420 mins.


8 products (A to H); total run
>me for one days demand = 300
mins
Demand / day = 200, 100, 100,
50, 50, 30, 20, 20
Time remaining for changeover =
120 mins
Ave changeover >me = 20 mins
No of changeovers per day =
120/20 = 6

Changeover Schedule
Prod

C/overs Batch EPE

A
B
C
D
E
F
G
H

2 / day
1
1
0.5
0.5
0.3
0.3
0.3

100
100
100
100
100
90
60
60

Lean at Wits

0.5
1
1
2
2
3
3
3

318

Replenishment Interval (or EPEI


Interval)
EPEI (the basis is): available resource Hme per day - Hme to run a days quanHty of
parts
= daily changeover Hme available
Then make best use of this Hme to reduce batch size

EPEI =

(changeover time per campaign)


Total available time per day - (run times per day)
This gives the EPEI in days
and batch size EPEI x daily demand
Lean at Wits

319

Batch sizing issues


The EPEI calculaHon is a check in itself: if batch sizes work out larger than

currently being run then the data is incorrect


Dierent machines may of course have dierent batch sizes.
If there are skilled sePers who do the changeovers, use their net available
Hme, not the machine available Hme
Sequence dependent changeover Hmes: Get an indicaHon of the batch
size as above, but then use constant sequence, variable quanHty ( that is,
when next due make up to the target level - x this at 2 x the batch size?)
If you have a ow sequence, say of 3 machines, take the largest batch on
any machine.

Lean at Wits

320

Supermarkets
Two possible locaHons for supermarkets

At the supplier workcentre


At the point of use

Point of use is simpler for visibility


But may have to locate at the supplier due to material handling consideraHons, or

for mulHple branching


Note there are inventory implicaHons on supermarket sizing because the
replenishment Hme may be longer if located at the point of use. This is a reason
for locaHng at the supplier point.
SomeHmes both, to achieve both the above. Then link via move kanbans.
Make to order inventory does not go in a supermarket

Lean at Wits

321

Sizing of Supermarkets
Note this variant of the standard
Supermarket symbol:
Covers the batch quanHty (EPEI)
Covers customer demand during the normal

replenishment transport lead Hme (order to


receipt)
Covers buer stock for customer demand
variaHon
Covers safety stock in case of internal failure
or breakdown

Lean at Wits

Lead times and Order Points


Replenishment Lead Hme = Total Transport Time + setup and make Hme
SomeHmes the setup and make Hme needs to be replaced by the full EPEI interval,

when there is likely to be a queue of work waiHng. Another factor is whether other
products are being used by the customer workcentre during the lead Hme - if so,
no demand takes place during this Hme, and the queue Hme can be omiPed.
Transport Hme is the Hme to physically collect the kanban and to return the batch
a}er processing. It is the worst case for the runner route - note that a runner may
someHmes collect a kanban every second route.
Order Point is customer demand *( lead Hme + safety stock)

Lean at Wits

323

See The New Lean Toolbox, page 115


Set the EPE target interval (ozen one day)
List the number of products to be made during this EPE

interval
Calculate the required run >me during this EPE target
interval
Calculate the >me available for changeover during this EPE
interval ( available >me - total run >me needed)
Calculate target changeover >me from
(>me available for changeover)/no of products

Lean at Wits

324

The pacemaker of the whole system


Maintains the pitch
Completes a collect and delivery cycle every pitch

increment
Starts at Heijunka box, and collects the authorised
work order; goes the supermarket and picks this
up; takes kanbans to cells; delivers material; moves
material; returns to Heijunka

Lean at Wits

325

Lean at Wits

326

Lean at Wits

327

Products
A B C

Spike Demands
G

Black
Zone

Red
Zone

Yellow
Zone

Green
Zone

Calculate Capacity by Zone


Daily
c/o times + run times
If black cant cope then overtime
Then calculate the time horizon
to complete all red and all yellow

Lean at Wits

328

Pitch Increments Today


8

9 10 11 12 13 14 15 16 17

9 10 11 12 13 14 15 16 17 18

Next Week
M T W Th F

Week After
M T W Th F

Part A

Part B

Missed Pitches Analysis


No
Reason

Part C

Pitches Missed

Lean at Wits

329

Heijunka Extensions: Different Pack out


Quantities and Pitch (2)
Pitch
8:00

8:15

8:30

8:45

9:00

9:15

9:30

9:45

10:00

Product
Red

Break

Green

Blue

Red, Green, Yel


have different
Pitches to
Blue

Yellow
Two cards per
Pitch, except
when Blue

May be balanced
for 3 pitches
if very different;
Otherwise ignore

Lean at Wits

330

Day-by-the-Hour (or Tally) Board


Use as an interim on the road to Heijunka
Target
Actual
Ahead +
Accum
Accum
Behind 8:00

9:00

10:00

11:15

50

50
50

50

40

50
100
50

90
50

150
50

140
70

200

210

Causes and
Countermeasures

0
-10

Breakdown
Red card issued

-10
+10

Caught up with
Extra manning
Lean at Wits

331

Day by Hour Board: Lake Region

Lean at Wits

332

Lean at Wits

333

Priority
Kanban
boards

Turning
machines

Wide aisle 4m

Lean at Wits

334

If boxes accumulate into


the red zone, Operators
must stop working on
other products and start
working on this one, until
the red zone is clear

Boxes
With products
accumulate on
a roller FIFO
Lane

Lean at Wits

335

Inside are
Details of
the products
to be made
And the
components
required

Clear
Plastic
Tablet,
Perhaps
120mm x 200mm

Tugger collects
Components at 10am
Production
between

10:30 and 11:00


Tugger collects
Finished Products
at 11:30am

Tugger (Runner)
goes around
once per
hour, but
production is
In half hour
increments; so
Tugger
collects two
Tablets per
round

Lean at Wits

336

Can be linked to long-cycle opera>ons


Using standard work packages
Some work packages may repeat several >mes
Can be used for warehouse opera>ons
The Heijunka box determines the pick cycles
Can use >me mul>ples e.g. 12, 24, 36 minute pick cycles
Can be used to synchronise various converging

paths

Each box slot contains cards which go to several routes

Lean at Wits

337


The Lean Toolbox, 4th edi>on, relevant sec>ons
Je Liker, The Toyota Way, McGraw Hill, 2004, Chaps 8 10
Hopp and Spearman, Factory Physics, Irwin, 2007 (3rd ed)
Kevin Duggan, Crea,ng Mixed Model Value Streams, Produc>vity,

2002
Goldra` and Cox, The Goal
See www.factory-physics.com/

Lean at Wits

338

Highly seasonal
Major product families
Some customized
Some machining with

changeover >mes
Large items (2 4 m)
MRP with MPS
Quality Issues

Laser cuwng, Welding,

Pain>ng, Assembly of
products
Job shop in above
areas.
Frequent delivery
failures
5 x 8 hr. week with
frequent over>me.
What to do?
Lean at Wits

339

Three stages
Job Shop
TOC
Lean Flow

Lean at Wits

340

Lean at Wits

341

Lean at Wits

342

Customers and Value

System

for Customers and all


Stakeholders
Benet / (Costs + Harm);
Value demand vs Failure
Demand (or Rework)

end-to-end value streams


holis>c, integrated, with
feedback

Process eciency

Flow eciency not resource


eciency
Con>nuous improvement
The big ve opera>ons
concepts
Timing

People

Demings 94 /6
Trust
Mo>va>on and small
wins
The brain and thinking.
Bias.

Innova>on

S curves and the need for


breakthrough


Lean at Wits
343

Change
And let it be noted that there is no more delicate matter to
take in hand, nor more dangerous to conduct, nor more
doubtful in its success, than to set up as a leader in the
introduction of changes. For he who innovates will have for
his enemies all those who are well off under the existing
order of things, and only the lukewarm supporters in those
who might be better off under the new. This lukewarm
temper arises partly from the fear of adversaries who have
the laws on their side and partly from the incredulity of
mankind, who will never admit the merit of anything new,
until they have seen it proved by the event.
Niccolo Machiavelli
Lean at Wits

344

The Physics of (Lean) Change?

Physical laws apply everywhere, whether or not you choose to believe in them says astronomer
Neil deGasse Tyson.

In 1918 Emmy Noether proved that the laws of physics are consequences of deep symmetries. A
thing is symmetrical if there is something you can do to it so that, a}er you have nished doing it, it
looks the same as before (Like some Lean transformaHons)

Newtons Laws
First law: An object remains at rest or conHnues to move at constant velocity unless acted on by an
external force
Second law: F = ma. The sum of forces on an object is equal to the mass of the object mulHplied by
the acceleraHon of the object. Third law: When one body exerts a force on a second body, the
second body simultaneously exerts a force equal in magnitude and opposite in direcHon on the rst
body.
Third Law. For every acHon there is an equal and opposite reacHon

Thermodynamics
The Second Law states that "in all energy exchanges, if no energy enters or leaves the system, the
potenHal energy of the state will always be less than that of the iniHal state." This is also commonly
referred to as entropy.

Lean at Wits

345

Hawthorne Studies
in other words, the mystery seemed to lie within

the worker, rather than within the system. This


impulse to blame or credit the individual person,
rather than the system within whiich he or she
works, although completely anHtheHcal to quality
management principles, persists to this day.
Quoted in John Butman, Juran: A lifeHme of Inuence,
Wiley, 1997 drawing on Elton Mayo.
like
d
n
u
s so
i
h
t
s
Doe

ule?
R
6
/
s 94
g
n
i
m
e

Lean at Wits

34
6

Drive out Fear

Lean at Wits

347

A Lean Leaders First Duty


To culHvate a culture that is intolerant to Systemic

Failure
And reduces Process Ignorance.
Problems are opportuniHes to be solved and not to
be ignored.

From Steve Spear

Lean at Wits

348

Leadership Styles

From Liker and Hoseus, Toyota Culture, 1998, p334


Lean at Wits

349

Jack Smith
Learning to Lead at Toyota..

Jack Smith: Parts A, B, C


Harvard Business School
Case Study

Lean at Wits

35
0

Leadership moves for Lean


Number

Leadership Moves

Leaders must be teachers

Build tension, not stress

Eliminate fear and comfort

Lead through visible parHcipaHon, not proclamaHon

Build lean into personal pracHce

From Flinchbaugh and Carlino,


The Hitchhikers Guide to Lean, 2006, page 32

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Three interacting concepts


Kata
Repetition

Brainwash
Nazis &
Jews
Korea
prisoners

Filters

Pygmalion
Effect

Yet

Maths
Army
recruits
Students

Habit and
Practice

Rituals
e.g. church
Frequency
and
Severity

Myth of
Genius
and
Talent

Small and
varied Wins

Amygdala
and Cortex

The
Progress
Principle

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Three interacting concepts


TWI

Practice
not Talent

Respect

AARs

Kata
Repetition

Yet

Leader
Standard
Work
Learning
cycles:
single
and
double

Heijunka

Small
and
varied
Wins

Genuine
Listening
Kaizen

Idea
Feedback

Go see

Ongoing
Mentoring

Reflection
Hansei

PDSA

Feedback from
others and
from work itself

Zero
Tolerance of
Defects,
mess
Andon

A3: break
into small
chunks

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Excellence and Habit


We are what we repeatedly do.

Excellence, then, is not an act, but a


habit
Aristotle

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Three interacting concepts


TWI

Leader
Standard
Work
Learning
cycles:
single
and
double

Yet and
Confirmation
Bias

AARs

Kata
Repetition

Go see

Ongoing
Mentoring

Reflection
Hansei

Kaizen

Respect

Idea
Feedback

Heijunka

Small Wins

Genuine
Listening

PDSA

Feedback from
others and
from work itself

Practice
not Talent

Zero
Tolerance of
Defects,
mess
Andon

A3: break
into small
chunks

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Kaizen, Leader Standard Work,


Kata, Repetition
David Mann
Mike Rother
Steve Spear
Deming
Schwartz

Leader Standard Work


Toyota Kata
Chasing the Rabbit, Uncovering
PDSA
Sony: PracHcing Simple Rituals
Daily walks, breaks, no e mails

Gladwell

10,000 hour rule for Mastery


How do you get to Carnegie Hall?
List of 75 innovators and inventors
David Shenk, The Genius in All of Us, Icon, 2010

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More on..Kaizen, Kata, Repetition,


Learning, Motivation
Colvin

Talent is Overrated

Do it again; ConHnue unHl

TWI

you know they know


Every Hme, not judgmental
Small step, conHnuous
feedback as moHvator
MulHple Kaizens
Habit


AAR

Amabile

Koenigsaecker

Duhigg


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7

Lean
358at
Wits

Lean
359at
Wits

Dilbert knows about bias..

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Avoiding Bias
You cant do it yourself!
It is intuiHve (or System One) thinking. AutomaHc.

Unconscious. So, never self contradicted and hence


is believed. Context dependent. (e.g. What does
walk to the bank mean to you?)
System Two Thinking is slow, eorkul, deliberate.
But you can check for System One bias with your
people or teams.
See the 12 tests in Daniel Kahneman, Before You
Make that Big Decision, HBR, June 2011, pp51-60
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Beware Halo Effect and Saliency Bias


Halo: Companies deemed excellent are frequently

circled by Halos. Once branded as excellent, people tend


to assume that ALL their pracHces are exemplary. The
same goes for excellent leaders. A companys success is
frequently aPributed to a leader and success will
conHnue as long as that leader is in place.
See Phil Rosenzweig, The Halo Eect

Saliency Bias: A past successful case study is taken as

evidence of or analogy for good pracHce. Of course, the


circumstances likely to be dierent.
See Daniel Kahneman, Fast or Slow
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David Mann on Culture and Lean


Leadership
David Mann considers the culture of an organizaHon to be: the sum of peoples
habits related to how they get their work done. He denes the term as a
concept we make up to organize and get a handle on what we have seen or
experienced. There are four elements:
1. Leader standard work where a rouHne checklist is developed to
standardize a porHon of a team leader or supervisors day to ensure that
essenHal elements of their job are performed.
2. Visual controls to enable the leader to monitor performance at a glance
by walking around the area. To visually manage their area through
observing what is in control and what is out of control.
3. Daily accountability process acHng upon performance as observed
through the visual controls and ensuring correcHve measures are put in
place for items idenHed as being out of control.
4. Leadership discipline ensuring standard work is adhered to,
guaranteeing the integrity of the process is controlled and all other
elements are sustained.

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Daily Accountability Board

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Creating and Sustaining Improvement:


Example of System Dynamics
capability

Investment in
capability

Reinvestment

Actual performance
Time spent
working

Shortcuts

delay

Time spent
on improvement

Pressure to
do Work

Work Harder

Performance Gap

Work
Smarter
Desired Performance
Pressure to
improve
After Repenning and Sterman, Nobody ever gets credit for fixing problems that never happened,
California Management Review, Summer 2001, pp 64 - 88
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From
Nelson Repenning and John Sterman,
Nobody Ever Gets Credit for
Fixing Problems that Never Happened:
Creating and Sustaining Process
Improvement
California Management Review
Summer 2001

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From Lake Region Manufacturing, Ireland

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Deming on Pay and Measures


Reward for good performance may be the same as reward to the

weatherman for a pleasant day




The New Economics, p 28
A numerical goal accomplishes nothing. Only the method is important,
not the goal. By what method? A numerical goal leads to distorHon and
faking, especially when the system is not capable to meet the goal


The New Economics, p 31
IncenHve pay and pay for performance, among others, are forces of
destrucHon. These forces cause humiliaHon, fear, self-defence,
compeHHon for gold star, high grade, high raHng on the job. They lead
anyone to play to win, not for fun. They crush out joy in learning, on the
job, in innovaHon. Extrinsic moHvaHon gradually replaces intrinsic
moHvaHon, self esteem, dignity


The New Economics, p 121

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8

Seddons view:
Better Thinking
Conventional Thinking

Begin here: Think


Purpose from the
customers view

Purpose
Creates de facto
purpose

Begin here:
Impose targets
And standards

Derive measures

Measures
Constrains
method

Liberates

Method

From John Seddon, The Whitehall Effect,


Triachy Press, 2015

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Motivation Flowchart
Can you increase
the tasks challenge
or variety, make it
less routine, or
connect it to a larger
purpose?

Use rewards,
even if then
rewards, but be
sure to:
Yes, I
can

Yes

Is the task
mostly
routine?

Thats
pretty
hard

No

Concentrate on building a healthy, longterm motivational environment that pays


people fairly and fosters autonomy,
mastery and purpose. Avoid if then
rewards in almost all circumstances.
Consider unexpected, noncontingent now
that rewards. And those rewards will be
more effective if:

From: Daniel H Pink,


Drive, Canongate 2009

1. Offer a
rationale for
why the
task is
necessary
2.
Acknowledge
that the task is
boring
3. Allow
people to
complete
the task in
their own
way
1. They offer
praise and
feedback rather
than things
people can touch
or spend

2. They provide
useful information,
ratherLean
thanat
anWits
attempt to control

370

Demings Profound Knowledge


(or, Why Things Go Wrong!)
System

HolisHc, opHmizing a part does not, feedback


relaHonships between the parts are crucial

VariaHon

Is a fact of life; snapshots are not valid observaHons


Common or special causes

Theory of Knowledge

without theory knowledge has no meaning


Do PDCA against a hypothesis; otherwise cant learn
Be interested in failures that disprove more valuable than success stories

Psychology

Only intrinsic moHvaHon moHvates in the long term


Extrinsic moHvators undermine in the long term
Management must create the condiHons for intrinsic moHvaHon a gemba style helps
with this.

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1

X: Cross Functional Working


EssenHal to Lean, but a problem of experHse
Socio-Technical Working..

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2

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3

Measures

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Targets and Measures

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Process and Person Measures

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Measures should
Provide short-term indicators of problems and no-problems
Be part of a feedback loop of surfacing and resolving problems
Focus on improving performance
Be capable of being acted upon.
Relate to learning or capability of the process or people

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The Power of Measurement


What gets rewarded gets done Michael LeBoeufs GMP
But
You get what you measure - more fundamental? Most

individuals and organizaHons dont get what they want


because they dont measure what they really want.
Examples..

(see Michael Blastland and Andrew Dilnot, The Tiger that Isnt, Prole, 2007 and

Dean Spitzer, Transforming Performance Measurement, AmaCom, 2007)

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Two types of Mesures


1. InformaHonal measurement - used for

informaHonal purposes
2. MoHvaHonal measurement - used for rewards and
punishment
The rst can be a powerful aid; the second almost
invariably negaHve.
Adapted from Dean Spitzer,
Transforming Performance
Measurement, AmaCom, 2007
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Two other types of Measures


ObjecHve - fact based; can be observed and veried
SubjecHve - a maPer of opinion or judgement, and an opportunity for

revenge, prejudice, fear, etc.

It is the second that gives big problems. Looking good as opposed to being good.

Who is measuring whom? (Witgensteins ruler)

Measurement should be a non-judgemental process of collecHng, analysing, and most
importantly understanding what is being measured.
Adapted from Dean Spitzer,
Transforming Performance
Measurement, AmaCom, 2007
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Dysfunctional Measurement
CheaHng (see for example LeviP in Freakonomics, 2006)
Measuring too much - and ignoring most of the signals - a complete waste or

delusion
Driving behaviour that favors the individual but is dysfuncHonal to the
organizaHon.

Whether measurement dysfuncHons occur has less to do with the number and more
to do with how people respond to the measure.

Almost everyone has experienced negaHve measurement used to expose negaHve
things - errors, cost overruns etc - and trigger negaHve emoHons - fear, threat,
blame, defensiveness
Adapted from Dean Spitzer,
Transforming Performance
Measurement, AmaCom, 2007
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Four Keys to Transformational


Measurement
Context
Everything that surrounds the measurement - social, psychological - eecHve
measurement can only occur in a posiHve context. Process not person.

Focus
Measure the right thing, dont measure too much, the vital few
IntegraHon
A framework, balanced, aligned, adapHve
InteracHvity
About ongoing measures, acted upon in real Hme, using feedback loops. A social
process, not a technical process.

Adapted from Dean Spitzer,


Transforming Performance
Measurement, AmaCom, 2007

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Four Steps to Redemption


1.

Select the right things to measure

n
n

2.

Measure these right things in the right way


n
n
n

3.

Value and Failure Demand (e.g call compleHon rates.)


Precision, Accuracy, Overhead, Reliability, Validity, Robustness
MulHple measures (OEE and schedule aPainment)

Embed the metrics in a disciplined process for improvement, not blame


n
n

4.

End to end processes, not verHcal silos


Determine the drivers of enterprise. (e.g having the right stock available when needed.)

Ways in which the measures will be acted on: who, visual progress
Problems with process design; problems with execuHon. These need dierent responses;
which of these is the cause? (Deming 94/6 rule)

Create an organizaHonal value system that uses the measures for ongoing
performance measurement
n

Role modeling, rewards, implementaHon, arHculaHon, commitment

From: Michael Hammer,


The 7 Deadly Sins, MIT
Sloan Management Review
Spring 2007

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Problem
P sells for 90; demand is 100 units / week
Q sells for 100; demand is 50 units / week
There are four resources - A, B, C, D, each with the

same xed cost.


Work Hme is 40 hrs per week (2400 mins)
Total xed costs (labour and rent) is 6000 / week

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We have a simple BOM and Routing


Q

P
Purchase
Part
5/unit

D
15 min

D
5 min

C
10 min

C
5 min

B
15 min

A
15 min

B
15 min

A
10 min

RM2
20/u

RM3
20/u

RM1
20/u

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Contribution
P: 90 - 40 - 5 = 45 / unit
Q: 100 - 40 = 60 / unit
Make Q !

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Extensions
By purchasing tooling for 2000 we can increase the

load on C (central) from 5 to 7 minutes, which


reduces the load on B (central) from 15 to 14
minutes
Should we go with this?

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Extensions (2)
ConvenHonal CosHng:
The total Hme to make a Q has increased! - so No!
Lean AccounHng
Looking at the LP, C is irrelevant; but any improvement in B

will go directly to the boPom line. A saving of 130 units x 1


min = 130 min. Means 130/30=4 units @ 60 = 240 for an
outlay of 2000 - an 8 week payback!

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Adapted from Brian Maskell

Problem 2: Before and After..


1 minute

CNC
Machine

6 minute

Grind

4 minute

Drill

4 minute

Turn on
Lathe

Batch of 3000

One piece flow

Grind

4 minute

Inspect
& Pack
4 minute
Labour time = 15 mins
Labour Cost = 5
Overhead = 5 x 3 = 15
Material = 2
Total 22

Drill

6 minute

Inspect
& Pack

4 minute
Lead time = 6 weeks
Inventory 25 days
Batch size = 3000
On-time deliv = 82%

Labour time = 18 mins


Labour Cost = 6
Overhead = 6 x 3 = 18
Material = 2
Total 26

Lead time = 2 days


Inventory = 2 days
Batch = 300 (1 day)
On time deliv = 99%

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Accounting for Lean and the New


Kitchen
In 2007 we had a new kitchen installed, a}er a ood.
The costs, of course, must be apporHoned between

all future meals.


It is now too expensive to eat at home.
So cooking must be outsourced..

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Basic Measures
Customer Service or saHsfacHon
Lead Time
Schedule Adherance
Inventory Turns (WIP to SWIP)

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QCDMMS

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Cell Measures
(by day)
Day by the hour Schedule aPainment
And deviaHon reasons
First Time Through
ROTIF aPainment
(Start - (Scrap + Rework)) at each workstaHon mulHplied
WIP to SWIP
Actual vs. Standard work in process audited daily
OEE
On selected machines
For the cell as a whole?
From Maskell &
Baggaley
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Practical Lean Accounting

393

Value Stream Measures


(by week)
Sales per Person
On-Hme Shipment
Orders in full shipped against customer requirements

Dock-to-dock Time
(RM+WIP+FGI) / (products shipped / hours in week)
Can use representaHve components e.g. unit containers

First Hme through


(Start - (Scrap + Rework)) at each workstaHon mulHplied

Average cost per unit


See next page

Accounts receivable days outstanding

From Maskell &


Baggaley
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394

Features of Hoshin
3 Levels of review (tasks, strategies, system)
Use real feedback on last periods actual planning process, and deployment.
Avoid blame (It is my fault that you are doing the wrong job - system not person)

(No blame does NOT mean no-one gets red)


Ask if the work that is being done right now is the right thing to do
Modifying the objecHves part way through if necessary
If 30% of the projects are late, you need to know why. If 0% are late, you also need
to know why
Real research is required - that is why you cannot have more than a few suppliers
involved, a more than a few Hoshins. Hoshin focuses on breakthrough.

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What do you need to do to win


an Olympic Medal?
__________________
__________________
__________________
__________________
__________________

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Policy Deployment Exercise


Pick an achievement that you or your (sport?) team are aiming at
Using the matrix, work through the
Aims
Projects
Delivery
Results
Establish the relaHonships between the elements
IdenHfy responsibiliHes

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Hoshin Cascade

deploy

Senior
Management
Create Policy

review

goals
deploy

means

means
Middle
Management
Horizontal Deployment
And Understanding

Implementation Level
Devise Implementation Plans

review

actions

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Unipart Policy Deployment


To what extent
Do the projects
Contribute to the aims?

What projects are the team


Expected to complete so as
To achieve the aims?
projects

What are the


policy
Objectives?
Why is success
Important?

aims

delivery

results
To what extent
Do the results
Contribute to the aims?

Market, operational and Financial


Benefits expected by period end

What will each project


Deliver?
To what extent?

What are the


Project
Deliverables?
What are the
SMART
KPIs
To what extent
Does each deliverable
Contribute to the results

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Deployment

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Hoshin and A3
Purpose

Future state

Current and
implement
5 whys

Purpose

Future state

Purpose

Current and
implement
5 whys

Purpose

Future state

Current and
implement
5 whys

Future state

Current and
implement
5 whys

Purpose

Future state

Current and
implement
5 whys

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Ford 1: From Jan Krafkik in Womack


Gemba Walks 2nd ed
Fords system, all three producHon lines were converted to a steady pace, powered by moving chains. The plant employed go/no-
go gauges to catch defecHve parts at the source and assure complete interchangeability, cellularized parts fabricaHon with
operaHons located in process sequence, a crude pull system for managing the movement of parts toward their point of use on
the line, and standardized work at a steady pace.
All in a new building designed with con,nuous ow as its central objec,ve. Most of the individual elements had been previously
tried in some form: it was their combinaHon in a complete system that produced Highland Parks remarkable leap in producHvity
and velocity.
These events of 1914 deserve to be celebrated for their transformaHon of world industrial pracHce. And I hope someone at Ford
will seize the opportunity on the occasion of the centennial.
The Lean Community should celebrate too, because what happened at Highland Park was foundaHonal for lean thinking. Henry
Ford and his associates were the rst truly systemaHc lean thinkers, with a passion for dramaHcally increasing value while
eliminaHng waste through careful process analysis from raw materials to nished product. Much of what Toyota achieved later
was built on Fords shoulders, as Taiichi Ohno at Toyota freely acknowledged.
Because of its enormous achievements, for a long Hme Highland Park existed in my minds eye as Fords stately Temple of Flow.
This bubble was rudely popped a few years ago when I took a Gemba walk and found a sadly dilapidated and largely empty
structure. Since my visit I have asked myself: What happened a}er the great breakthrough of 1914? What can we learn from
what happened? And what might happen next at Highland Park.
As Fords plant was reaching its zenith in the 1920s, Henry was racing to complete his new complex the Rouge on the
southwest edge of Detroit. While Highland Park was dedicated to a single vehicle, with the idea of maximizing the velocity of
product ow from start to nish, the Rouge complex was dedicated to scale. Parts for many types of vehicles, to be assembled
all over the world, were cranked out -- not in process villages within one plant but in process factories on the massive site. The
buildings needed for each category of item engines, transmissions, bodies, various types of parts and more massive buildings
for transformaHons of materials steel mills, foundries, forges were connected by conveyors under central control.
This seemed impressive to visitors, but in pracHce large buers of parts were needed at many points to insure steady producHon.
While Ford could claim that the plant started with iron ore on day one and produced a nished vehicle 2.5 days later, this was
simply the sum of the Hme needed for the value creaHng steps. Actual start-to-nish Hme, including waits in buers, was many
Hmes longer and for the vehicles assembled elsewhere up to 90%

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Ford 2: From Jan Krafkik in Womack


Gemba Walks 2nd ed

But the Rouge was a compelling idea in an age of industrial concentraHon and scale economies. If a lot was good,
then even more was bePer, and the Rouge was the most anyone could imagine. When the new facility completed
in 1927 in Hme for the Model A, Ford also oered a new name mass producHonto tout his achievement. The
term ow producHon that Ford had coined earlier to describe Highland Park quickly disappeared from use.
(It bears men>on that Fords concept of mass produc>on at the Rouge was where Toyota started its thinking
about lean produc>on and was the concept our MIT automo>ve team set out with in our global survey of
manufacturing performance. In the 1980s we were simply unaware of the signicance of the system created
earlier at Highland Park.)
Once the Rouge was in place, Highland Park became an anachronism. Too small for the body shop needed for
stamped steel vehicles, seemingly too ramped with its machines crowded Hghtly together to minimize movement,
too focused on a single product. Highland Park simply didnt scale in an age of scale. So, when Model T producHon
came to an end in 1926, Ford converted Highland Park to high-volume producHon of certain categories of parts
(for shipment to assembly plants around the world) and to low-volume assembly of a few vehicles such as delivery
trucks for the Post Oce.
Over Hme, as Fords original objecHve of auto ownership for everyone became widespread, workers could drive to
new plants far away from the high land costs of the city. Cheap land on the citys edge made it possible to spread
out producHon on one level, making Highland Park look too verHcal, with its ve oors and gravity slides that
moved parts from fabricaHon in the top of the building to nal assembly at the boPom. In just a few years
Highland Park had become the picture of the old-fashioned factory.
A}er 1930, producHon declined slowly at Highland Park, and with it the populaHon of the Hny (3 square miles) city
surrounding the plant, which had grown from 4,000 in 1910 just as the plant opened to a peak of 53,000 in 1930.
Decline was checked for a while by the presence of Chryslers corporate headquarters and engineering center a
few blocks away, but Highland Parks descent accelerated a}er the boom years of World War II when all capacity
of any type was needed. By 1973 Ford disconHnued manufacturing at Highland Park and in 1974 the property was
sold to a developer who tore down a few of the buildings to create a shopping mall (which also failed.) A}er
Chrysler le} for the northern suburbs in 1993, to be close to the homes of its managers and engineers, the trend
gathered speed and by 2012 Highland Park had a }h of the populaHon (11,000) of the peak.

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Ford 3: From Jan Krafkik in Womack


Gemba Walks 2nd ed
Today the buildings on the site are mostly empty except for some document storage for Ford and a garment warehouse. In 2011 the City of
Highland Park removed two thirds of its street lamps due to inability to pay the electric bill. Forty percent of the remaining populaHon is living
below the poverty level. In 100 years the Temple of Flow transiHoned from the most dynamic industrial site in the world in a rapidly
expanding city, to an abandoned industrial relic in one of the poorest and most dangerous places in America. Is there any way out of this
smoking crater?
I think there is, and for reasons that go far beyond any consideraHons of urban redevelopment. In recent decades the car industry has
progressed from a collecHon of naHonal industries to a completely globalized acHvity with a few massive companies selling the same products
in many markets. As product technology has converged on stamped steel bodies and every manufacturer strives to sell in every market, the
scale requirements for each vehicle plakorm (on which a number of body styles are o}en based) have risen to a million or even two
million vehicles per year. In this situaHon, massive assembly plants -- with 250,000 to 500,000 units of capacity -- make imminent sense. A
facility with the scale of Highland Park has no place.
However, the massive scale requirements of this strategy leave many white spaces in the market where smaller numbers of buyers may want
vehicles with very dierent capabiliHes. These vehicles cant be produced on the ve or six standard plakorms of every car maker. AlternaHve
power vehicles, high-end sports cars, specialty trucks, and city cars are examples. The common characterisHc of these vehicles is that they are
suited for extruded aluminum or ber-composite body structures with plasHc surface panels, which are cost eecHve at scales of up to about
50,000 units per year.
A recently announced example is the BMW i3, an all-electric vehicle with a ber composite tub for the passenger compartment, extruded
aluminum structures at both ends for the engine and the storage compartment, and a snap-on plasHc skin. BMW plans to build it in a Hny,
dedicated factory in Munich near the delivery center it has created for customers to receive its top-of-the line vehicles. (By contrast Tesla and
Fysker opted for new moHve power vehicles but with convenHonal metal bodies and chose to build them in abandoned tradiHonal car plants:
NUMMI in Fremont, California, in the case of Tesla, and GMs Wilmington, Delaware, light truck plant for Fyskers aborHve eort to develop a
second, high-volume vehicle.
With luck, Tesla might generate enough volume to jusHfy a high-scale plant. A bePer approach for those who follow is to use a new
technology body as well, and target lower volumes, building addiHonal modules of producHon if necessary.)
Looking at Highland Park in this new situaHon, one can see a double opportunity: A producer could use the exisHng building to fabricate
major components on the upper oors and drop them to nal assembly on the ground oor, at a modest investment compared with current
car industry norms. The building is already there and the state and federal governments would doubtless help with the

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Innovation, Design and NPD Overlaps


Design
Process

Innovation

Cost
Reduction

Lean
Startup
Design
Thinking

New Product
Introduction

John Bicheno 2015

406

Innovation
Creativity:
Insight
Improvisation
Divergent Thinking

Adjacent
Possible

Innovation
TRIZ
Disruptive
Technology

and many
others

Adjacent Possible is discussed at length in


Steven Johnson, Where Good Ideas Come From,
Penguin, 2010

John Bicheno 2015

407

Design Process
Set Based
And
Cadence
(Toyota)
Learning Cycles
And
Rapid Prototyping
Concurrent
and
Simultaneous
Engineering

LAMDA

Design
Process

Reinertsen
and Kingman

The Innovators
Method
Design for
Manufacture
(DFM)
Risk
Tradeoffs:
Product Price,
Product Cost,
Production Cost,
Time to Market
John Bicheno 2015

408

Design Cost Reduction..


Value
Engineering

Target
Costing

Group
Technology

Contribution analysis
And
Contribution / b-neck minute
Design
Wastes

Cost
Reduction

Variety Effectiveness
Process
Market Analysis
Product Analysis
Part Analysis

Variety Analysis
Tools (VAT)
(Galsworth)

From Gwendolyn Galsworth, Smart Simple Design Reloaded,


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Visual Lean Enterprise Press, 2015

409

Design Thinking..
IDEO
Systems
Thinking
Double
Diamond
(Exploration and
Exploitation)

Design
Thinking

Vanguard?

Service Design
Good Product /
Bad Product
(Adams)

Lean Consumption

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New Product Introduction..

3P

Ramp Up:
One feature at a time;
Phase in transition

New Product
Introduction
Experimentation

Supplier
Partnership

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Lean Startup
Agile
Software

Lean
Customer
Development

Lean
Startup

SCRUM

Kanban
for
Software

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Innovation: Recent Articles in HBR


Build an InnovaHon Engine in 90 days, HBR, Dec

2014, p60
The Discipline of Business ExperimentaHon, Dec
2014, p70 (Useful for dissertaHons!)
Leading your team into the unknown, HBR, Dec
2014. p80 (This is a summary of the book The
Innovators Method)
How I did itIntuits CEO on Building a Design-
Driven company, Jan 2015, p35
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Creativity
Insight
Move one stick to
make a different goat
The goat problem
Right and le} brain
What do pine, crab, source have in common?
No such thing as a single sudden ash; rather brain working in
background

Improvising
The brick test: how many uses of a brick? (Gilford and USAF during
WW2). Points 1 to 5 for creaHve uses
IQ and creaHvity

Divergent Thinking
Jazz
Switch one of the steps (like puung marmalade then rubbing the

toast)
RouHne, easy, non-thinking tasks ; relax and do something dierent
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Creativityand Kata
Kata: reinforcing and building pathways and habits
The more you do something, the more likely you are to do
it again (Gilbert)
CreaHvity: breaking pathways and habits
Seeing things dierently; establishing new pathways
System 1 and System 2 ?

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