waste overview and benefits

1

WASTE OVERVIEW AND BENEFITSBy: Romains Bos

2

TYPICAL SITUATION

75%

3

75%

KAIZEN IMPROVEMENTS ARE THE RESULT OF WASTE ELIMINATION

Sys

tem

Per

form

ance

Time

1

4

IMPROVING WORK MEANSREDUCING WASTE (MUDA)

Waste Is Any Activity For Which An All-knowing*, All Wise Customer Would Not Be Willing To Pay Because The Activity Does Not Significantly Improve The Probability Of Getting A More Reliable, Higher Performing Product Or Service Over The Long-term At The Best Possible Price

DEFINITION

* All Knowing = Perfectly understands every aspect of your business and how it should be operated to maximize long-term success for customers, employees and shareholders

5

OHNO’S WASTES

PEOPLE

TYPESOF

WASTE

Processing

Motion

Waiting

FixingDefects

Inventory

QU

ALIT

Y

Making Too Much (WIP)

MovingThings

QUANTITY

75%

6

OHNO’S ORIGINAL SEVEN WASTES

Processing Waste Is Doing Things Inefficiently For Any Reason

Motion Waste Is All Walking or Reaching

Waiting Waste Is All Waiting For Parts, Data and So On

Making Too Much Waste Is All Work-in-process (WIP)

Movement Waste Is All Transport

Inventory Waste Is All Raw Goods and Finished Goods Inventory

Fixing Defects Waste Is All Rework and Repair

PE

OP

LEW

AS

TE

QU

AN

TIT

YW

AS

TE

QUALITYWASTE

7

Non-Essential

Non-value Added (Waste or “Muda”)

60s

Ne

ces

sar

y

Cri

tic

al

0.02% 0.020% 99.96%

ValueAdded

60s 345,600s (6d-12 shifts) 345,720s

TotalsMachining Test Lot Delays, Changeovers, Transport, Etc.

TYPICAL SITUATION - PLANT

8

60s 60s 345,600s (6d-12 shifts) 345,720s

Totals

Before

After $500K 30s 60s 345,600s (6d-12 shifts) 345,690s

Machining Test

Only 0.009% less in total processing time

Claim 50%Improvement!

Non-Essential


Ne

ces

sar

y

Cri

tic

al

0.020% 99.96%

ValueAdded

0.02%

0.01

%

Lot Delays, Changeovers, Transport, Etc.

Spend!!Spend!!Spend!!

TRADITIONAL RESPONSE - PLANT

9


ValueAdded

DANGER!

It Is Much MORE:• Dangerous• Risky• Time Consuming • High Tech• Expensive• Customer Impacting• Demanding Of

Management Time

It Is Much: • Safer• Less Risky• Faster• Lower Tech• Cheaper• Customer Friendly• Less Demanding Of

Management Oversight

To Speed Up Or Improve Value Added

Activity

To Speed Up Or Improve Non-value

Added Activity

10

A PROBLEM WITH PERCEPTION

The Executive Perception

The Middle Management Perception

The Informed Hands-on Performer Perception

11

THE TRADITIONAL EXECUTIVE RESPONSE

The Perception

The Reaction

THROW A LOT OF MONEY/TECHNOLOGY AT WHAT APPEARS TO BE THE VALUE ADDED WORK

The Result

12

THE TRADITIONAL MIDDLE MANAGEMENT RESPONSE

The Perception

The Result

THROW “SOME” MONEY/TECHNOLOGY AT VALUE ADDED WORK AND REMOVE “OBVIOUS” WASTES

The Perception “Rearranged”

The Reaction

13

THE INFORMED HANDS-ON PERFORMER RESPONSE

The Perception

The Result

ATTACK ALL NON-VALUE ADDED ACTIVITY AT THE MICRO-PROCESS LEVEL

The Perception “Rearranged”

The Reaction

“Easily” Recognized Non-value Added

Micro-processRecognizable

Non-valueAdded

True Value Added

14

EXTRA “BENEFITS (????)” - PLANT

• Reduction Of Machining Time Reduces “Standard Work” (Earned Hours)

• The Standard Pricing Model Then Drives Down The Sales Price Of The Part Even If There Is No Price Pressure

• The Efficiency Numbers Look Great And The Sales Department Is Happy (Anybody Can Sell Cheaper)

• Lot Size And Inventory Increase Because The Investment Has Be Justified By Making Earned Hours And Absorption Look Good

• We Lose Money And Can’t Ship Any Faster!

15

Non-Essential

Non-value Added (Waste)

Ne

ces

sar

y

Cri

tic

al

ValueAdded

Totals

Before

After $5K

75% faster in total processing time!

Machining Test

60s 60s 345,600s (6d-12 shifts) 345,720s

60s 60s 86,400s (1.5d-3 shifts) 86,520s

Lot Delays, Changeovers, Transport, Etc.

0.07% 0.07%

99.96%

99.86%

75%Less

Waste

A FIRST PASS LEAN RESPONSE - PLANT

16

REAL BENEFITS

• Lots Are Smaller

• Inventory Is Dramatically Reduced

• Less Floor Space Is Required

• Capacity And Throughput Are Greater With No Capital Expense

• Flexibility To Order Demands Is Greater

• Lead Time Is Reduced

• Actual Costs Are Reduced

• Yet, Traditional Accounting Methods Make Things Look Bad Because Earned Hours And Absorption Decrease!!!!!!

17

PEOPLE

TYPESOF

WASTE

Processing

Motion

Waiting

FixingDefects

Inventory

QU

ALITY

Making Too Much

(WIP)

MovingThings

QUANTITY

“SPL

OR

K!”

TOOLS ATTACK BUT…

“GLU

BO

OR

K!”

ConsensusDecision Making

Tools

Team-OrientedProblem Solving

QFD

Balanced Scorecard

Constraint Management

Flow Charts

Process Reengineering

FMEA

One-By-OneFlow Strategy

Poka-Yoke

Value StreamMapping

Black Belts

QFD

SMED

SixSigma

ISO/QS

IntegratedProduct

Development

Gain Sharing

SPC

Kaizen Blitzes

Total Preventive Maintenance

Visual Displays

High Performance Teams

5 “S”

Shainin

Shift 7 2 Meetings

Primary Visual

Displays

Ho

shin

Kan

ri

DOE

EnterpriseSoftware

(EIS)Kanban

s

20 Keys

18

…DON’T USUALLY LAST

PEOPLE

TYPESOF

WASTE

Processing

Motion

Waiting

FixingDefects

Inventory

QU

ALIT

Y

Making Too Much (WIP)

MovingThings

QUANTITY

Pro

ces

s

Re

en

gin

eeri

ng

Value StreamMapping

QFD

Poka-

Yoke

Bla

ck B

elts

IntegratedProduct

Development

Kanbans Kaizen Blitzes

SMED

SPC

Sh

ainin

Boing!

I’M BACKTO EAT MORE

PROFITS!!!

19

TYPE OFWASTE

WASTE REDUCTIONAPPROACH

METHOD DESIREDRESULT

Standard Work

WorkplaceOrganization

Kaizen

WorkplaceManagement

Just-in-time

Error Proofing

Processing

Motion

Waiting

WhatYou Need,WhenYou

NeedIt

HighlyEfficient,

SafeWorkAreasWithHigh

Output

Good Quality

Inventory

MovingThings

Making Too

Much

Fixing Defects

Leveling

Kanban

Quick Setup

PreventiveMaintenance

Detection

Warning

Prediction

Prevention

CATEGORYOF WASTE

PEOPLE

QUANTITY

QUALITY

FOCUSPOINTS

Work BalanceWIPLocation/AmountKanban LocationKanban TypesLot SizesChangeover AnalysisPM Analysis

LayoutLabelingTools/PartsArrangementWork InstructionsEfficiencyTakt TimeSkills TrainingShift MeetingsCell/Area TeamsVisual Displays

Appropriate AutomatedAssistance

Fixture ModificationsSuccessive ChecksLimit Switches

Check SheetsPhotocells, Templates,

Etc.Cross Training

PRINCIPLEWORKSHEETS

Standard WorkSheet (SWS)

Time ObservationForm (TOF)

Standard WorkCombination

Sheet (SWCS)Work Load

Balancing Sheet(WLBS)

Kaizen TargetSheet (KTS)

Kaizen ActionSheet (KAS)

SWSSWCSWLBSKanbansTable of

ProductionCapacity ByProcess (TPCP)

PM SchedulingSheet (PMSS)

SWCS

Error ProofingAction Sheet(EPAS)

Error Proofing “ToDo” List (EPL)

Skill VersatilityVisual DisplayJidoka

Autonomation

WHY?NOT A WORD ABOUT HOW TOIMPLEMENT AND SUSTAIN!

Mas

ter

Jarg

on C

hart

Of

Lean

Ope

ratio

ns

20

75%

OFFICE KAIZEN WASTES

Processing

Han

d-o

ffV

aria

bil

ity

InventoryScheduling

TYPESOF SURFACE

WASTE

Information

21

TYPICAL SITUATION - OFFICE

Non-Essential


30m

Ne

ces

sar

y

Cri

tic

al

0.35% 0.17%99.48%

ValueAdded

15m 8,640m (6 days) 8,685m

TotalChecking Hand-offs, In-box waiting, Signatures, Mailing prep., etc.

QuotePreparation

22

TRADITIONAL RESPONSE - OFFICE

Only 0.17% less in total processing time

Claim 50%Improvement!

Non-Essential


Ne

ces

sar

y

Cri

tic

al

0.17% 99.96%

ValueAdded

0.17%

0.17%

Spend!Spend!Spend!

30m 15m 8,640m (6 days)

TotalChecking Hand-offs, In-box waiting,

Signatures, Mailing prep., etc.Quote

Preparation

Before

After 100K 15m 15m 8,640m (6 days)

8,685m

8,670m

23

EXTRA “BENEFITS (????)” - OFFICE

• More Opportunities For Errors With Additional Data Entry, Screens And Complexity

• More Software Means More Training Expense

• Cost Of Computers And Software Is Pure Profit Lost

• More Quotes (Including Additional “Marginal” Quotes) Are Prepared Because “We Can Quote Twice As Fast!”

• The System Clogs Up Even More (Hire More People?)

• The Result: We Waste Time And Money And Can’t Quote Any Faster!

24

A FIRST PASS LEAN RESPONSE - OFFICE

Non-Essential


30m

Ne

ces

sar

y

Cri

tic

al

0.35% 0.17%

99.48%

ValueAdded

15m 8,640m (6 days)

TotalChecking Hand-offs, In-box waiting, Signatures, Mailing prep., etc.

QuotePreparation

66.7% Faster in total processing time

After 10K 30m 15m 2,851m (<2 days) 2,896m

Before 8,685m

2/3 Reduction

25

Processing

Han

d-o

ffV

aria

bil

ity

InventoryScheduling

TYPESOF SURFACE

WASTE

Information “SPL

OR

K!”

TOOLS ARE GREAT, BUT…..


Tools


QFD

Balanced Scorecard


Flow Charts


FMEA


Poka-Yoke

Value StreamMapping

Black Belts

QFD

SMED

SixSigma

ISO/QS

IntegratedProduct

Development

Gain Sharing

SPC

Kaizen Blitzes


Visual Displays


5 “S”

Shainin

Shift 7 2 Meetings

Primary Visual

Displays

Ho

shin

Kan

ri

DOE

EnterpriseSoftware

(EIS)Kanban

s

20 Keys

“GLU

BO

OR

K!”

26

Processing

Han

d-o

ffV

aria

bil

ity

InventoryScheduling

TYPESOF SURFACE

WASTE

Information

Pro

ces

s

Re

en

gin

eeri

ng

Value StreamMapping

QFD

Poka-

Yoke

Bla

ck B

elts

IntegratedProduct

Development

Kanbans Kaizen Blitzes

SMED

SPC

…THERE’S MORE TO IT THAN TOOLSS

hain

in

Boing!

I’M BACKTO EAT MORE

PROFITS!!!

Implementation Specialists

KCG AGAIN, NOT A WORK ABOUT IMPLEMENTATION!

A Highly Productive,

Informed And Enthusiastic Workforce

Focused On Key

Processes That Are

Fast, Results- Driven,

Accurate, Repeatable,

Value-added, Aligned With Organization

Goals, Scrubbed Of Waste, And Supported &

Driven By Accurate,

Timely Metrics

Information Flow Studies

Technology Gap Analyses

Accuracy, Relevancy And Availability Studies

CATEGORY AND TYPE OF WASTE

WASTE REDUCTIONAPPROACHES

OFFICEKAIZENSM

OUTCOME

PR

OC

ES

SMETHODS AND TOOLS

DILO analysisValue stream MappingRACI assessmentKaizen work sheets Structured problem solvingWorkplace organization5S The 7 Quality Control ToolsLean Daily Management SystemFlow ChartingSkill versatility analysis/matricesFlow chartingWaste checklistStatistical process control chartsChange teamsOffice Kaizen blitzesWork instructionsSkills trainingProcess benchmarkingCore competency assessmentBrainstorming (e.g., Affinity diagramming)Cross trainingVisual displaysError proofingData integrity checklistRed-yellow-green analysisIN

FO

RM

A-

TIO

N

Project Management Methods

Balanced Scorecard

Error Proofing


Six Sigma Methods

ProcessingMotionWaitingAssignmentGoal AlignmentControlVariabilityTamperingStrategicReliabilityStandardizationSuboptimizationSchedulingWork-aroundUneven FlowCheckingErrorInventoryWork-in-processFixedMoving thingsTranslationMissingHand-offIrrelevancyInaccuracy

PE

OP

LE Kaizen

Job Descriptions

Workplace Organization

Work Standards

AS

SE

T Asset Optimization

Work Flow Analyses

Material Practices Analyses

Mas

ter

Jarg

on C

hart

Of

Lean

Off

ice/

Adm

in.

28

75%

INTEGRATED PRODUCT DEVELOPMENT WASTE

PEOPLE

Processing

Motion

Waiting

Composition

Standardization

Suboptimization

PROCESS

TEAM

Structure

Conflict

Goal

Alignm

ent

Focus

Boundary

Co-

loca

tion

Rep

ortin

g

Performance

Res

ourc

es

Alignm

ent

STRUCTURE

Assessment

TOOLSTECHNO

LOG

Y&

Knowled

ge

Inte

ract

ion

“Ility”

Par

amet

er

SurfaceWaste

29

ATTACKING SURFACE WASTESIS NOT ENOUGH

• It’s Easy To Eliminate Any One Instance Of Surface Waste (SW)• SW Is Only A Symptom Of An Underlying Problem, Not A Cause• “They’re Baaaaack!” (SW Is The Profit Killer That Keeps On

Giving Taking)• Removing One Instance Of SW Does Not:

– Put In New Measurements– Assure That The Root Cause Is Eliminated– Focus The Process Workers In The Correct Manner– Provide The Necessary Resources To Permanently Stop It

From Reoccurring

30

PEOPLE

TYPESOF

WASTE

Processing

Motion

Waiting

FixingDefects

Inventory

QU

ALITY

Making Too Much

(WIP)

MovingThings

QUANTITY

“SPL

OR

K!”

TOOL ATTACK AGAIN

“GLU

BO

OR

K!”


Tools


QFD

Balanced Scorecard


Flow Charts


FMEA


Poka-Yoke

Value StreamMapping

Black Belts

QFD

SMED

SixSigma

ISO/QS

IntegratedProduct

Development

Gain Sharing

SPC

Kaizen Blitzes


Visual Displays


5 “S”

Shainin

Shift 7 2 Meetings

Primary Visual

Displays

Ho

shin

Kan

ri

DOE

EnterpriseSoftware

(EIS)Kanban

s

20 Keys

31

LEAN APPROACHES AND TECHNIQUESTYPE OFWASTE

WASTE REDUCTIONAPPROACH

METHOD DESIREDRESULT

Standard Work

WorkplaceOrganization

Kaizen

WorkplaceManagement

Just-in-time

Error Proofing

Processing

Motion

Waiting

WhatYou Need,WhenYou

NeedIt

HighlyEfficient,

SafeWorkAreasWithHigh

Output

Good Quality

Inventory

MovingThings

Making Too

Much

Fixing Defects

Leveling

Kanban

Quick Setup

PreventiveMaintenance

Detection

Warning

Prediction

Prevention

CATEGORYOF WASTE

PEOPLE

QUANTITY

QUALITY

FOCUSPOINTS

Work BalanceWIPLocation/AmountKanban LocationKanban TypesLot SizesChangeover AnalysisPM Analysis

LayoutLabelingTools/PartsArrangementWork InstructionsEfficiencyTakt TimeSkills TrainingShift MeetingsCell/Area TeamsVisual Displays

Appropriate AutomatedAssistance

Fixture ModificationsSuccessive ChecksLimit Switches

Check SheetsPhotocells, Templates,

Etc.Cross Training

PRINCIPLEWORKSHEETS

Standard WorkSheet (SWS)

Time ObservationForm (TOF)

Standard WorkCombination

Sheet (SWCS)Work Load

Balancing Sheet(WLBS)

Kaizen TargetSheet (KTS)

Kaizen ActionSheet (KAS)

SWSSWCSWLBSKanbansTable of

ProductionCapacity ByProcess (TPCP)

PM SchedulingSheet (PMSS)

SWCS

Error ProofingAction Sheet(EPAS)

Error Proofing “ToDo” List (EPL)

Skill VersatilityVisual DisplayJidoka

Autonomation

32

Processing

Han

d-o

ffV

aria

bil

ity

InventoryScheduling

TYPESOF SURFACE

WASTE

Information “SPL

OR

K!”

TOOLS ARE GREAT, BUT…..


Tools


QFD

Balanced Scorecard


Flow Charts


FMEA


Poka-Yoke

Value StreamMapping

Black Belts

QFD

SMED

SixSigma

ISO/QS

IntegratedProduct

Development

Gain Sharing

SPC

Kaizen Blitzes


Visual Displays


5 “S”

Shainin

Shift 7 2 Meetings

Primary Visual

Displays

Ho

shin

Kan

ri

DOE

EnterpriseSoftware

(EIS)Kanban

s

20 Keys

“GLU

BO

OR

K!”

Implementation Specialists

KCG “TRADITIONAL” OFFICE WASTES AND TOOLS

A Highly Productive,

Informed And Enthusiastic Workforce

Focused On Key

Processes That Are

Fast, Results- Driven,

Accurate, Repeatable,

Value-added, Aligned With Organization

Goals, Scrubbed Of Waste, And Supported &

Driven By Accurate,

Timely Metrics

Information Flow Studies

Technology Gap Analyses

Accuracy, Relevancy And Availability Studies

TYPE OFWASTE

WASTE REDUCTIONAPPROACHES

OFFICEKAIZENSM

OUTCOME

CATEGORYOF WASTE

PR

OC

ES

SMETHODS AND TOOLS

DILO analysisValue stream MappingRACI assessmentKaizen work sheets Structured problem solvingWorkplace organization5S The 7 Quality Control ToolsLean Daily Management SystemFlow ChartingSkill versatility analysis/matricesFlow chartingWaste checklistStatistical process control chartsChange teamsOffice Kaizen blitzesWork instructionsSkills trainingProcess benchmarkingCore competency assessmentBrainstorming (e.g., Affinity diagramming)Cross trainingVisual displaysError proofingData integrity checklistRed-yellow-green analysisIN

FO

RM

A-

TIO

N

Project Management Methods

Balanced Scorecard

Error Proofing


Six Sigma Methods

ProcessingMotionWaitingAssignmentGoal AlignmentControlVariabilityTamperingStrategicReliabilityStandardizationSuboptimizationSchedulingWork-aroundUneven FlowCheckingErrorInventoryWork-in-processFixedMoving thingsTranslationMissingHand-offIrrelevancyInaccuracy

PE

OP

LE Kaizen

Job Descriptions

Workplace Organization

Work Standards

AS

SE

T Asset Optimization

Work Flow Analyses

Material Practices Analyses

SU

RF

AC

E

34

SOMETHING IS LURKING BENEATHSURFACE WASTE

And It Doesn’t Smell Too Good!

MMMmmmm, Chateau de Lost Profits, two quarters old, I think…left side of the garbage can.

35

YOU SMELL LEADERSHIP WASTE

FOCUSWASTE

STRUCTUREWASTE

OWNERSHIPWASTE

DISCIPLINEWASTE

36

LEADERSHIP WASTES MUST BE ATTACKED SIMULTANEOUSLY WITH SURFACE WASTE

• The Long-term, Dramatic Reduction Of LW “Is” World-class Leadership

• Leadership Waste (LW) Drives Every Other Controllable Problem Or Deficit In An Organization

• If LW Is Significantly Reduced, The Organization Will Be Successful Regardless Of The Tools It Uses

• LW Cannot Be Seen Easily By Those Who Generate It

• LW Is Always Defended With Vigor By Those Create Most Of It

• Few “Tools” Or “Programs” Address The Reduction Of LW As A Significant Endeavor

37

LEADERSHIP MUST CREATE FOURCONDITIONS AT EVERY LEVEL

FOCUS

STRUCTURE

DISCIPLINE

OWNERSHIP

What Is Important?

How Will It Be Pursued?

Will We Stick To It?

Do Results Impact Our Pride?

38

LEADERSHIP WASTES

Focus Waste Is the Loss That Arises When Management and Employees at All Levels Are Not Consistently Aligned and Energized to Address Critical Issues

Structure Waste Is the Loss of Value That Arises When There Is Not a Formal System of Behaviors and Processes in Place to Require Focus on Improvement

Discipline Waste Is the Loss Caused by Failure to Maintain the Behaviors and Processes of the Structure

Ownership Waste Is the Loss That Occurs When Employees Are Not Inclined/permitted/allowed to View Their Work Areas As Direct Extensions of Themselves

Arise From a Failure of Leadership to Harness the Potential That Resides in All Work Groups

39

EXECUTIVE

MANAGEMENT

OTHERSS

TR

UC

TU

RE

DIS

CIP

LIN

E

OW

NER

SH

IP

FO

CU

S

THECHALLENGE:

GET 12 CHECKS

40

EXECUTIVE

MANAGEMENT

OTHERSS

TR

UC

TU

RE

DIS

CIP

LIN

E

ON

WER

SH

IP

FO

CU

S

PRE-LEAN APPROACHES

YES YES YES

YES ? ? YES

YES

? ? ? ?

41

EXECUTIVE

MANAGEMENT

OTHERSS

TR

UC

TU

RE

DIS

CIP

LIN

E

OW

NER

SH

IP

FO

CU

S

THEACHILLES

HEEL OF PRE-LEAN

APPROACHES

YES YES YES

YES YES

YES

THEPRE-LEAN

GAP

42

THE PRE-LEAN GAP ALLOWS THE “WASTE CAKE” TO EXIST

YES ? ? YES

? ? ? ?

YES ? ? YES

? ? ? ?

Processing

Motion

FixingDefects

Making Too

Much

MovingThings

Inventory

Waiting

ProcessStability &Reliability

TYPESOF SURACE

WASTE

43

IN THE OFFICE, TOOYES ? ? YES

? ? ? ?

YES ? ? YES

? ? ? ?

Focu

sS

truc

ture

Ow

ners

hip

Dis

cipl

ine

LEADERSHIP WASTES

Processing

Han

d-o

ffV

aria

bil

ity

Work-aroundInventory

SchedulingTYPES

OF SURFACEWASTE

Information

44Focus

StructureStructure

OwnershipOwnership

THE WASTE CAKE

DisciplineDiscipline

45

EXECUTIVE

MANAGEMENT

OTHERSS

TR

UC

TU

RE

DIS

CIP

LIN

E

OW

NER

SH

IP

FO

CU

S

WIN-LEAN FILLS IN THE

GAPYES YES YES

YES YES YES

YES

YES YESYES YES

YES

46

TYPESOF SURFACE

WASTE

Information

Decision MakingTools


QFD

Balanced Constraint

Management

Flow Charts


FMEA


Poka-yoke-Yoke

Value Stream

Mapping

Six Sigma

QFD

SMED

SixSigma

ISO/QS

BalancedScorecard

SPC

Kaizen Blitzes

Visual Systems

5 “S”

Shainin

Primary Visual

Displays

DOE

Kanban

s

TPS Worksheets

SLMI-IT

FOCUS

STRUCTURE

DISCIPLINE

OWNERSHIP

Stream

F

47

Structure

Structure

Mentoring

Metrics

LeanDaily Management System

SLM2T3 = “SLIM-IT”SM

Tools Technology

Teamwork

48

THE SLIM-IT LEAN OPERATIONS CUBE

Ownership

Structure

Discipline

Focus LEADERSHIP WASTES

PEOPLE

Processing

Motion

FixingDefects

Making Too

Much

MovingThings

Inventory

QUANTITYQUALITY

Waiting


TYPESOF SURACE

WASTE

StructureLean Daily

Management SystemMentoringMetrics

Teamwork

Technology

Tools

49

THE SLIM-IT LEAN OFFICE CUBE

People

Processing

Motion

Waiting

Han

d-o

ff

StandardizationStra

tegi

c

Assignment

Tran

slat

ion

Uneven Flow

Mis

sin

g

Alignment

Irrelevancy

Checking

Var

iab

ility

Tam

per

ingC

on

trol

Suboptimization

Work-aroundWork-in-process

Inaccuracy

Inventory

Fixed

Moving T

hings

Reliabilit

y

Error

Scheduling

Process

AssetInformation

TYPESOF SURFACE

WASTE

Ownership

Structure

Discipline

Focus

StructureLean Daily


Teamwork

Technology

Tools

LEADERSHIP WASTES

50

THE FULL OPERATIONS CUBE

• “Value Stream Mapping (“as is” & “To be”)

• Box and wire diagram dynamic analysis

• Waste checklist• 7 Management Tools• Advanced statistical

process control methods• Office Kaizen

reengineering blitzes• Asset optimization• DILO analysis • RACI analyses• Kaizen work sheets • 5 “S”• Kanban• Error proofing• Structured problem

solving• Work loading analysis

• Key Goals Visual Focus ChartSM

• 7 Quality Control Tools• Value chain analysis• Workplace organization• Scheduling analyses• Benchmarking analysis• Work leveling studies• Core competency

analyses• Skill versatility matrices• Data integrity checklist• Red-yellow-green

analysis• Exposition participation• Financial

decomposition/analysis• Visual displays• Unsafe behavior analysis• Autonomation /jidoka

SURFACE WASTE REDUCTION METHODS

Ownership

Structure

Discipline

Focus LEADERSHIP WASTES

PEOPLE

Processing

Motion

FixingDefects

Making Too

Much

MovingThings

Inventory

QUANTITYQUALITY

Waiting


TYPESOF SURACE

WASTE

StructureLean Daily


Teamwork

Technology

Tools

51

THE FULL OFFICE CUBE

• “Value Stream Mapping (“as is” & “To be”)

• Box and wire diagram dynamic analysis

• Waste checklist• 7 Management Tools• Advanced statistical

process control methods• Office Kaizen

reengineering blitzes• Asset optimization• DILO analysis • RACI analyses• Kaizen work sheets • 5 “S”• Kanban• Error proofing• Structured problem

solving• Work loading analysis

• Key Goals Visual Focus ChartSM

• 7 Quality Control Tools• Value chain analysis• Workplace organization• Scheduling analyses• Benchmarking analysis• Work leveling studies• Core competency

analyses• Skill versatility matrices• Data integrity checklist• Red-yellow-green

analysis• Exposition participation• Financial

decomposition/analysis• Visual displays• Unsafe behavior analysis• Autonomation /jidoka

SURFACE WASTE REDUCTION METHODS

People

Processing

Motion

Waiting

Ha

nd-

off

Standardization

Stra

tegi

c

Assignment

Tran

slat

ion

Uneven Flow

Mis

sin

g

Alignment

Irrelevancy

Checking

Va

riab

ilit

yT

amp

erin

gCo

ntro

l

Suboptimization

Work-aroundWork-in-process

Inaccuracy

Inventory

Fixed

Moving T

hings

Reliabilit

y

Error

Scheduling

Process

AssetInformation

TYPESOF SURFACE

WASTE

Ownership

Structure

Discipline

Focus

StructureLean Daily


Teamwork

Technology

Tools

LEADERSHIP WASTES

52

WHY TRANSFORMATION EFFORTS FAIL

Error #1 Not Establishing A Sufficient Sense Of UrgencyError #2 Not Creating A Powerful Enough Leadership

CoalitionError #3 Not Creating A VisionError #4 Undercommunicating By A Factor Of 10Error #5 Not Removing Obstacles To The VisionError #6 Not Systematically Planning For And Creating

Short-term WinsError #7 Declaring Victory Too SoonError #8 Not Anchoring Changes In The Culture

From “Why Transformation Efforts Fail”, John P. Kotter, Harvard Business Review

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EMPLOYEES’ INFORMATION NEEDS

What Employees WantA

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Type of Information

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What Employees Get

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HOW ARE WE DOING SO FAR?

None Almost A Some Fair A Completelynone little amount Lot




Creating A Vision

Over-communicating By A Factor Of 10

Creating A SenseOf Urgency

Establishing A Leadership Coalition

55

HOW ARE WE DOING SO FAR?





Removing Obstacles To The Vision

Creating Short-term Wins

Not Apt To Declare Victory Too Soon

Anchoring Changes In The Culture

56

RESULTS FROM OTHERS





Establishing A Leadership Coalition

Creating A Vision

Over-communicating By A Factor Of 10

Non-management employees (4,459)Middle management/supervisors (1,454)

Upper management & executives (1,233)

Creating A SenseOf Urgency

57

RESULTS FROM OTHERS





Removing Obstacles To The Vision

Creating Short-term Wins

Not Apt To Declare Victory Too Soon

Anchoring Changes In The Culture

Non-management employees (4,459)Middle management/supervisors (1,454)

Upper management & executives (1,233)

58

THE OBJECTIVE

N o n e A lm o s t A S o m e F a i r A C o m p le t e l yn o n e l i t t l e a m o u n t L o t

N o n e A lm o s t A S o m e F a ir A C o m p le t e lyn o n e l i t t le a m o u n t L o t

N one A lm os t A S om e F a ir A C om p le te lynon e litt le am o un t Lo t


N one A lm ost A Som e Fair A C om plete lynone little am ount Lot


N o n e A lm o s t A S o m e F a ir A C o m p le te lyn o n e lit t le a m o u n t L o t

N o n e A lm o s t A S o m e F a ir A C o m p le te lyn o n e lit t le a m o u n t L o t

Creating a sense of urgency

Establishing a leadership coalition

Creating A vision

Over-communicating by 10X

Removing obstacles to the vision

Creating short-term wins

Not apt to Declare victory too soon

Anchoring changes in the culture

59

THE BENEFITS OF LEAN

• The Benefits Are There For The Taking

• The Benefits Always Include Increased Market Share, Lowered Cost (And Price), Higher Profits And Happier Customers (And Shareholders)

• Lean Is The Only Answer Known That Provides These Benefits: YOU HAVE NO OTHER CHOICE THAT IS KNOWN ON THIS PLANET!

• Lean Never Fails If You Do It

• Saying Lean Is Not Doing Lean

• Every Successful Business That Competes In An Over-capacity Or Price-sensitive Market Is Doing Lean Whether It Knows It Or Not

60

RESULTS OF THE "NEW WAY"

Labor Hours Per Car 31.0 16.0 19.0

Defects Per Car 135.0 45.0 45.0

Space Per Car 8.1 4.8 7.0

Average Inventory (Hrs.) 80.0 2.0 16.0

G.M. TOYOTA NUMMI

1 G.M. (FRAMINGHAM, MASS, USA )-CLOSED 1989

KEY QUALITY PARAMETER1 2 3

2 TOYOTA (TAKAOKA, JAPAN)

3 NUMMI (FREMONT, CA, USA)

From The Machine That Changed The World, Womack, Jones, Roos, Rawson Associates, 1990.

61

AEROPQUIP CORPORATION, NEW HAVEN PLANT

An Industry Week Magazine Plant Of The Year - 1997

• Return On Net Assets 39% In 1996• $417,000 Savings From Redesign Of Flow Control

Distributor Assembly• 505 Work-In-Process Inventory Turns Per Year• Work-In-Process Inventory Loss Less Than 0.1%• Worker Developed Human Resource Policies• $1M In Labor Costs Eliminated By Work-Cell Redesigns In

1995 & 1996 With No Layoffs• Cut F67 Valve Manufacturing Cycle By 98%• On-Time-Or-Free Delivery Guarantee• On-Site Engineers At Customer Locations

Products: Valves, Coupling And Flow Controls

62

AEROQUIP-INOAC CO.,LIVINGSTON, TENN An Industry Week Magazine Plant Of The Year -

2000

• No Lost-time Accidents in Last Four Years • Warranty Costs As Percentage of Sales: 0.2% • Plant-level Profitability Increased 234% in Last Five Years• In 1999 Employees Generated an Average of 8.5 Suggestions

Each • The Employee Suggestion Program and Continuous-improvement

Work Teams Generated $741,761 in Cost Savings Last Year • An Average of Three Kaizen Events Are Held Each Month• Share of the Rear-deck-spoiler Market Is Now 60% • On-time Delivery of 99.997% • Current Annual Labor Turnover Rate 1.6%; Never a Layoff

Products: Automotive Exterior Trim

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BAE SYSTEMS CONTROLS, FORT WAYNE, IN


• Order-to-shipment Lead Time Cut 90% in a Low-volume/high-mix Environment

• Value-added Productivity Soared 112% in Five Years • Work in Process Reduced by 70% • Product Reliability Improved by 300%, Based on Mean

Time Between Unscheduled Removals of Equipment in Service

• Zero Lost Workdays in 1999• Sales Per Employee Is up 97%

Products: Aircraft Controls

64

COMPAQ'S AMERICAS' SOFTWARE, NASHUA, NH


• 99.5% On-time Shipment Rate• 99.99% Absolute Inventory Accuracy Rate• Less Than 1% Attrition Rate• 95% of Production Workers in Self-directed Work Teams • Machine Uptime 99.87%• 99.8% First-pass Yield• In 1999, 124 Continuous-improvement Events Cut $2 Million in

Labor, Material, and Other Costs• 54 Hours of Training Annually• Shipped More Than 500,000 Orders in 1999, Compared With

292,000 in 1995

Products: Software Manufacturing and Packaging

65

CONTINENTAL TEVES, MORGANTON, NC An Industry Week Magazine Plant Of The Year - 2000

• In-plant Defects Cut 70% Over Last Five Years • Warranty Costs Associated With Defects Cut 71% • Units Per Day Per Person Increased From 11 to 18 in Last

Three Years• Unit Volume Increased 200% Over Last Five Years While Total

Inventory Dropped 35%• 1.4 Million Work Hours Without a Lost-time Accident• Since 1996, Productivity Increased From 8,500 Units Per Day to

13,000 Units Per Day, Without Additional Manpower or Manufacturing Lines

• At the Same Time, In-plant Rejects Have Dropped From Over 5% to 0.5%

• Customer Rejects Down Over the Last 18 Months to 25 PPM

Products: Electronic Brake Systems

66

DELPHI RIMIR MATAMOROS, TAMAULIPAS, MEXICO


• 99.7% First-pass Yield• 100% On-time Delivery Rate • Customer Reject Rate on Shipped Products: 10 PPM,

Down From 3,000 PPM Five Years Ago. • 78.3% Reduction in Finished-goods Inventory in the Last

Five Years • 95% Reduction in Lot Size in the Last Five Years • 80% Decrease in OSHA-reportable Lost Workday Rate in

Last Five Years• Customer Return Rate of Less Than 10 PPM Since 1997

Products: Automotive airbags

67

VALEO KLIMASYSTEME GmbH BAD RODACH, GERMANY


• Lead Time Cut From 11.8 to 5.2 Days in Last One and a Half Years

• From 1995 to 1999 Injection-molding-machine Changeover Time Reduced From Three Hours to 15 Minutes on Average

• First-pass Yield of 99.6% Within Injection-molding Autonomous Production Unit

• All Walls and Machines Are Painted White; White Also Is the Standard Dress Code

• The Plant Currently Has 106 Suppliers, Compared With 177 Three Years Ago

Products: automotive heating, cooling, and ventilation systems

68

PAC INTERNATIONAL LTD.,STOCKPORT, ENGLAND


• 92% Improvement in First-pass Yield Over Last Five Years for Major Component

• 95.7% of Purchased Materials No Longer Requiring Incoming Inspection

• 90.6% Reduction in Manufacturing Cycle Time in Last Five Years • 80% Reduction in Lead-time in Last Five Years • Sales Rose From Breakeven of US$4.44 Million in 1992 to Over $17

Million in 1999 and Profits Have Soared• All Production Workers Get Twice-yearly Assessments in Which

They Meet One-to-one With Managers• 70% of Workers Are Competent in Multiple Skills and That Number

Is Rising

Products: Electronic access controls

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SOLECTRON CORP. - Milpitas, CA An Industry Week Magazine Plant Of The Year -

1998• On-time Delivery Rate Of 99.9%• Order To Shipment Lead Time Is One Day For Desktop

CPUs (Industry Average Of 5 Days)• Cycle Time For Engineering Start-up Reduced By A

Factor Of Five In Last Three Years• 23% Annual Growth Rate• 7 PPM In-Plant Defect Rate On Manufactured

Components And Finished Products; 63% Reduction In Defect Rate Since 1995

• Only 3% Labor Turnover• 100% Of Plant Workforce On Customer Focus Teams• Two-year Productivity Increase Of 22.3% (Sales Per

Employee)

70

OOPS!COOPER AUTOMOTIVE - WAGNER LIGHTING An Industry Week Magazine Plant Of The Year -

1997

• Order To Shipment Lead-times Cut By 83%• 140 Work-In-Process Inventory Turns (Up From 58)• In Last Five Years:

– 88% Reduction In In-Plant Defects – 99.3% Reduction In Customer Reject Rate– 56% Productivity Increase– 100% Customer Retention Rate

• Warranty Costs Just 0.36% Of Sales• 99.6% On-Time Delivery Rate• 0.4 Lost-Workday Rate Per 100 Employees• Sales Increase Of 750% Since 1990

Products:Automotive Lighting

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