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: Lean Process Improvement

Overview

Mapping the things customers value into a process is a powerful way to confirm we are working on the right things and then to identify ways to improve the customer’s experience. The concept of value helps identify work aligned with customers and important to the business versus work that should be eliminated now or when feasible to do so. Even if a process was optimally designed in the past, customer and business needs change. Technology also evolves. Over time, organizations may add unnecessary operations for a variety of reasons. This requires processes to be redesigned or discarded. In this chapter, we discuss how the concept of customer value can be enhanced by applying Lean tools and methods to simplify, standardize, and mistake-proof processes.

The application of Lean tools and methods will enable organizations to consistently realize significant operational benefits through higher material and information throughput. But an integrated approach is required to fully realize all potential benefits. A Lean system has several operational components that function together. Several of these must be implemented before customers can see significant improvement in their experience. The application of process improvements to enhance customer experience requires improving quality, ensuring equipment and machines are properly maintained and available for use, standardizing work, mistake-proofing operations, and applying other tools and methods. These tools and methods must be integrated, and there is a sequence for their

TABLE 6.1

Competitive Metrics - Lean

Metric

1. Lead time and throughput rate

2. Asset utilization

3. Percent of value-add time in total time

4. Unit cost

5. First-pass yield

implementation. As an example, maintenance improvements, work standardization, and mistake-proofing precede takt time stabilization.

Transforming an organization into a Lean enterprise requires a great deal of practical and hands-on learning through the application of Lean tools, methods, and concepts to projects. The effectiveness of a lean transformation can be measured using the key metrics shown in Table 6.1, namely reductions in lead time, higher throughputs, higher asset utilization including inventory reductions for constant sales, increased percentages of value-add time in the total process time, lower unit costs, and higher first-pass yield. In this chapter, we will discuss Lean tools and methods that will improve these metrics.

Lean deployments deliver benefits, several of which are listed in Table 6.2. The first is higher customer on-time delivery (i.e., schedule

TABLE 6.2

Ten Benefits of a Lean Deployment

Benefit

1. Higher customer on-time delivery (schedule attainment)

2. More value-add time

3. Higher throughput rates of materials and information

4. Faster machine or job changeovers (especially at bottlenecks)

5. Greater machine uptimes (available time)

6. Higher quality of work (less scrap/rework/warranty/returns)

7. Less floor space utilized

8. Lower inventory

9. Higher supplier on-time delivery

10. Lower overall system cost

attainment). A simple and standardized system will tend to execute its delivery schedule more consistently than one that is more complex and exhibits high process variation. A value-add operation has three attributes. The operation must create a feature or function requested by the customer, the work object (i.e., material or informational) must be physically transformed, and the work must be done right the first time. Value flow mapping (VFM) at a process level is a useful tool for identifying work that does not add value. This helps reduce the percentage of nonvalue-add (NVA) work. Elimination of NVA work will increase the relative percentage of value-add work. Note that value stream mapping is done at an enterprise level, whereas VFM occurs at a process level.

VFM is also useful for identifying operations that constrain the flow of materials or information (i.e., bottlenecks). This helps a VFM team focus projects to increase the time available at a system’s bottleneck. Lean improvements include faster machine throughputs, less time for job changeovers (especially at the system’s bottleneck resource), greater machine uptime (i.e., available time), and higher quality of work (i.e., reduced scrap, rework, warranty, and returns). Additional benefits are less floor space utilized, lower system inventory, and lower overall system cost.

A Lean enterprise consists of the ten operational components listed in Table 6.3. A Lean enterprise will have these components and perhaps some others specific to their industry. If an organization implements just a few components, it will not realize all the advantages of

TABLE 6.3

Ten Components of a Lean System

Component

1. System performance measurements

2. Just-in-time workflow; stable system

3. Standardized work (5-S)

4. Mistake-proofing

5. High quality

6. Total productive maintenance

7. Single-minute exchange of dies

8. Visual workplace

9. Container design (i.e., packaging)

10. Supplier agreements

a Lean enterprise. Performance measurements show where to focus improvements and will help evaluate their effectiveness. Measurements are important because a Lean implementation requires several years. The second key component is just-in-time (JIT) and standardized workflows. JIT implies that raw materials, components, and information are delivered to a process just when they are needed for production. JIT workflows increase system flexibility because raw materials, work-in-process (WIP) inventory, labor, and other resources and capacities can be kept at a low level and made available only when needed for transformation activities. Demand and lead-time variation are also decreased by implementing a JIT workflow.

Lean systems require that work tasks to be standardized and done consistently. Work standardization includes written work and inspection instructions, employee training, and tools and methods. Mistake-proofing is very important for work standardization. It starts early in the design phase using design for manufacturing methods and other design tools. If correctly implemented, only the simplest design that meets customer requirements is released for production. High quality is a prerequisite for standardized operation and JIT workflows.

As a Lean deployment evolves and processes become predictable, more advanced tools and methods are applied. Two are Total Productive Maintenance (TPM) and the single-minute exchange of dies (SMED). TPM is the study and deployment of preventive and corrective maintenance practices. It ensures machines will not unexpectedly break down and disrupt process throughput. SMED is a set of tools and methods that study how jobs are set up. Its goal is to reduce setup time and cost to increase scheduling flexibility as well as quality and reliability of setup. In SMED, a key concept is to separate external from internal setup operations. Internal setup operations must be done on-line whereas external ones can be done off-line. The concept is that if operations can be done off-line, there will be little direct impact on production schedules. Modifications to on-line setup tooling and fixtures and application of mistake-proofing strategies help reduce the time required to complete on-line setups.

Visual controls are integral for status communication within and between processes. In a visual workplace, the operational status can be immediately seen (i.e., they are visible). The key steps necessary to implement a visual control system will be discussed later in this chapter.

TABLE 6.4

Ten Methods to Improve Process Efficiency

Method

1. Use capacity intelligently.

2. Improve quality maintenance, and training.

3. Create product family processes.

4. Use multifunctional equipment.

5. Measure lead time, quality, and up time.

6. Simplify processes.

7. Use multiskilled workers.

8. Only accept orders you can complete.

9. Make to order with no excess.

10. Partner and share demand data with a few suppliers.

Additional supporting components of a Lean system include rules governing the flow of standardized amounts of material or information (service industries) based on the concept of “Kanban” containers and supplier agreements, which will also be discussed later in this chapter. Long-term cooperative supplier agreements ensure suppliers have real-time access to their customer schedules (i.e., demand) to align their production to the customer’s process.

Table 6.4 summarizes ten proven methods to increase process efficiency. The first is intelligent use of capacity within a system to maintain its scheduling flexibility to ensure short lead times. Improvements in quality, maintenance, and training reduce process breakdowns and reduce rework. The creation of product family processes based on similar product or service designs allows the design of common processes. This reduces the number of job setups and increases scheduling flexibility. Other benefits with fewer setups are higher yields from preventing setup scrap and reduced lead time for producing different products. Using multifunctional equipment also increases process flexibility because equipment can be used to produce more than one type of product. The important concept is to not create overly complicated and expensive equipment, rather to have equipment that can be easily modified for different types of work. Design commonality also contributes to designing multifunctional machines.

Metric measurement of lead time, quality, and up time are also important. Process simplification is a major topic of this chapter. Multiskilled workers increase process flexibility because direct labor can be matched more closely to production. An organization should only commit to orders it knows it can efficiently produce on time. Making promises to deliver orders that cannot be made results in scheduling problems because other orders must be reprioritized for production. This practice wastes capacity and other resources. Products should be made with no excess unless this is a strategic decision based on external or internal factors. Making an excessive amount of a product also wastes capacity and resources. Finally, contractual obligations should be consistent across a supply chain and should promote common incentives to ensure an uninterrupted supply of materials and services.

 
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