Lean Ops - Kellogg School of Management

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Oct 19, 2013 (3 years and 5 months ago)

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Slide
1

Lean Operations

© Van Mieghem


Lean
Operations


House Building Game


The transition to Lean Ops


The Paradigm of Lean Operations: The
ideal


Basic philosophy of Lean Ops


Lean tools for synchronization & waste reduction


Driving Continuous Improvement through Visibility

Slide
2

Lean Operations

© Van Mieghem

Paradigm of Lean Operations:


In Search for the Holy Grail


The
ideal
Process =


Synchronization of all flows


1
x

1


production on demand


defect free


At lowest possible cost



Waste =
Gap between
ideal
and
actual



How do we sync at lowest cost?


> Synchronization or Lean Tools


How do we set up a
system
to continually reduce waste ?

Slide
3

Lean Operations

© Van Mieghem

Improvement as a process

The
Ideal

Operation



perfectly synchronized with demand



at lowest cost

The
Actual

Operation

D

= deviation from ideal

= waste, variability, inflexibility

= opportunity for improvement

Reduce
D


Root cause analysis & problem solving
mindset


Waste reduction (Lean tools)


Variability reduction (Six Sigma, TQM)

Increase visibility of
D


Andon pulls, workplace organization


Exploratory stress


Process measurement, visual
management

Continuous

Improvement

Process

Slide
4

Lean Operations

© Van Mieghem

The architect behind Lean Operations:


Toyota’s Taiichi Ohno and waste elimination


“Toyota Production System: Beyond Large
-
Scale
Production” by
Taiichi

Ohno





Lean operations has been defined as “a
business system

for organizing and managing product development,
operations, suppliers, and customer relations that
requires less human effort, less space, less capital, and
less time to make products with fewer defects to precise
customer desires, compared with the previous system of
mass production.”

Slide
5

Lean Operations

© Van Mieghem

Waste

Incidental
Activity

Value
Added
Activity

Value Added Activity


Work or time that directly increases the
value of the product in the eyes of the
customer (e.g. Assembly of parts)


What the customer is paying for

Waste


Work or time that does
not add any value to a
product


Waste is sometimes
called "
muda
", from
the Japanese for waste

Incidental Activity


Work or time that does not directly add
customer value, but which is currently
necessary to maintain operations (e.g.
small movements to reach for material
for assembly)

Objective

The objective is to maximise
the proportion of value
added activity by eliminating
waste and incidental activity

Elements

of work

There are three elements of work


Slide
6

Lean Operations

© Van Mieghem

8

Motion

Walking around the
factory looking for
something or fetching
equipment

Inventory

Excess stock of drugs or
equipment in clinical areas

Waiting

Mortgage applications
piling in a desktop in tray

Rework

Documenting the same
information in several places
for a new hospital patient

Over
-
processing

Polishing a luxury walnut
dashboard to a mirror finish
on both sides

Over
-
production

Making parts on a piece rate basis to
fully load individual machines

Intellect

Failure to make full use of the
whole team’s experience and
knowledge

Transportation

Transferring finished goods
to off
-
site packing and then
freighting onto customers

THERE ARE 7 CLASSIC TYPES OF WASTE



wormpit


Slide
7

Lean Operations

© Van Mieghem

Lean Tool #1: cut
batch

sizes


An illustrative example


Consider the following 4
-
step process:





What is:


The bottleneck:


The process capacity or maximal
R:



The theoretical flow time
T
th


The minimal amount of inventory needed to run at capacity:


I
th



Call this scenario 1, the best. Let’s now consider what happens if we
have (transfer) batches


A

1 min/job

Resource 1


B

1 min/job

Resource 2


C

1 min/job

Resource 3


D

1 min/job

Resource 4

Slide
8

Lean Operations

© Van Mieghem

Lean Tool #1: cut batch size


ABCD example continued

Batch Shop
(Batchsize = 4)



A


B


C


D

0

Elapsed Time

2

1

4

3

2

1

4

3

2

1

4

3

2

1

4

3

T

T =

I =

R =

8

7

0

9

Flow Shop
(Batchsize = 1)



A


B


C


D

0

Elapsed Time

1

T

1

1

1

2

2

2

2

3

3

3

3

4

4

4

4

5

T =

I =

R =

= scenario ?

6

5

8

7

6

5

8

7

6

5

8

7

0

9

2

1

4

3

6

5

0

9

2

1

Slide
9

Lean Operations

© Van Mieghem


Changeover / setup / batch related costs must be reduced if batch size is
to be decreased

Synchronization requires smaller batch sizes or even 1
x
1

Slide
10

Lean Operations

© Van Mieghem

Lean Tool #2: process on demand =
pull



Just
-
In
-
Time
operations


JIT

= have exactly
what
is needed, in the

quantity

it is needed,
when

it is
needed,
where
it is needed.



“hand
-
to
-
mouth” material flow


needed by whom?

Slide
11

Lean Operations

© Van Mieghem

Lean Tool #2: Synchronization with demand:


customer demand
pulls

product

Supplier

inputs

outputs

Process

Customer

PUSH: Inputs availability triggers execution

Supplier

inputs

outputs

Process

Customer

PULL: Outputs need triggers execution

Slide
12

Lean Operations

© Van Mieghem

Lean Tool #2: how make pull system in house game?

Production

control

Roof

cut

Base

cut

FA

Base

assembly

Slide
13

Lean Operations

© Van Mieghem

Lean Tool #2: Pull Implementation:

Kanban Production Control Systems

Kanban

Processing
center
i

Processing
center
i
+ 1

WIP

Job

http://www.toyota.co.jp/en/vision/production_system/video.html

Slide
14

Lean Operations

© Van Mieghem

Lean Tool #3:
Quality at the Source

Defects

Found at:



Own Station



Next Station



End of Line



Final

Inspection



End User’s

Hand





$



$



$



$



$



Impact to the

Company







Very

Minor







Minor

Delay







Rework







Resched.

of work







Significant

Rework







Delay in

Delivery







Additional

Inspection







Warranty

costs







Adminis

tra

tive costs







Reputation







Loss of

Market

Share







Slide
15

Lean Operations

© Van Mieghem

Reducing Waste:


Quality at the Source


Fool
-
proof/Fail
-
safe design (
Poka
-
Yoke
)


Inspection


Self


Automated (
Jidoka
)


Line
-
stopping empowerment (
Andon
)


Trouble!

Approach for operators

• Preventative

• If trouble, STOP!

• If defective don't pass

Line
-
stopping empowerment

Approach for machines


A mistake
-
proofing system prevents errors and defects


Stop line when defects are detected or machine breaks
down

Poka Yoke and Jidoka

Slide
16

Lean Operations

© Van Mieghem

Lean Tool #4:
Flexible Resources & Standardized Work


Cross training of workforce allows resource pooling



Use of IT in services

Slide
17

Lean Operations

© Van Mieghem

17

WORKPLACE ORGANIZATION


5S


Maintenance of

improved condition

Waste identification and elimination


Check what is
needed and get
rid of what is
not used


Place each item
in its optimal
position in the
workplace and
employ visual
management


Keep the area
and equipment
always clean. Set
a cleaning
program


Improve and maint
-
ain
the first 3 "S" by
improving the en
-
vironment:


visual controls


standard machine
improvements


standard procedures
for all similar areas


Employ systems
to monitor 5S and
ensure that it is
constantly
maintained

Organize the workplace with the aim to


Identify and eliminate waste


Maintain and continuously improve the workplace/equipment


Improve morale and increase worker involvement

Objectives

Sort

Set in
order

Shine

Sustain

Standardize

5S is a structured approach to systematically clean and organize the workplace to support a
lean working environment

Slide
18

Lean Operations

© Van Mieghem

Lean Tool #5:
Heijunka



Mixed Level/Balanced Production


Batch

Production Schedule



Mixed

Production Schedule




(
AAAA
BBBB
..)




(
A
B
A
B
...)


Product


April 1.................15...........................30





April 1....................15..................
.....30



A




B

time

FGI

time

FGI

http://www.toyota.co.jp/en/vision/production_system/video.html

Slide
19

Lean Operations

© Van Mieghem

SILS: shipping in line sequence


Business Mall adjacent to Russelsheim’s LeanField

Slide
20

Lean Operations

© Van Mieghem

Lean Tool #6: From

Functional Layout


to

Product
Cell

organization

Production

Control

Roof

Cut

Base

Cut

FA

Base

Assy

Production

Control

Production

Control

Production

Control

Roof

Cut

Roof

Cut

Roof

Cut

Base

Cut

Base

Cut

Base

Cut

Base

Assy

Base

Assy

Base

Assy

FA

FA

FA

Department 1

Department 2

Department 2

Department 2

Department 2

Cell 1

Production

Control

Roof

Cut

Base

Cut

FA

Base

Assy

Cell 3

Production

Control

Roof

Cut

Base

Cut

FA

Base

Assy

Cell 2

Slide
21

Lean Operations

© Van Mieghem

Scrap &

Rework

Missed Due Dates

Too Much
Space

Late
Deliveries

Poor
Quality

Machine
Downtime

Engineering
Change Orders

Long queues

Too much paperwork

100% inspection

Inventory

Towards a
system
of continuous improvement:

Increase Problem Visibility


Lower water to expose rocks

Slide
22

Lean Operations

© Van Mieghem

Visibility: Time plays the role of Inventory in Lean
Service Operations

TIME

Slide
23

Lean Operations

© Van Mieghem

Towards a
system
of continuous improvement:


Kaizen

Tools


Reduce variability


Standard operating procedures


Increase
visibility of waste and quality at source


Line
-
stopping empowerment (
Andon
)


Quality inspection: Self & Automated (
Jidoka
)


Fool
-
proof/Fail
-
safe design (
Poka
-
Yoke
)


Targeted improvements: root cause analysis (6 Why’s)


Active worker involvement


Time for experimentation


Supplier involvement


Exploratory
stress




Human infrastructure & process measurement and review (visual
management)

Slide
24

Lean Operations

© Van Mieghem

Learning Objectives


Lean Operations


Paradigm of Lean Operations:


Strive for the
ideal
by eliminating waste


This is a total business management system


Synchronization Tools

1.
Reduced batch sizes

2.
Pull

production control systems (vs.
push
)

JIT & Kanban control

3.
Quality at the source

4.
Resource pooling

5.
Level loading (Heijunka)

6.
Layout: Cellular operations


Set up a System for Continuous Improvement

1.
Reduce variability (standard operating procedures)

2.
Increase visibility (river analogy)

3.
Improve human infrastructure

Slide
25

Lean Operations

© Van Mieghem

Slide
26

Lean Operations

© Van Mieghem


Sears (SHC) does actually have a whole social media team who handles their
Twitter and
Facebook

accounts.


They are VERY pro
-
active on those
accounts.


SHC contracts out to Viewpoints, which is the company I work for.


We
run the
MySears
,
MyKmart

and Craftsman Community platforms for them, and
handle customer service in a pro
-
active way on those accounts


Along with the senior customer service reps, and folks at corporate,
MySears

is very
fortunate to have a handful of associates or call center employees who pop on to
assist, as well.


They are not paid, but are influencers who receive an "Advisor"
recognition badge for their help.


We wish we had more folks like these, as their
contributions are most helpful.



Here are a few threads that we would consider "wins" for SHC, as the site helped
solve an issue or complaint for a particular customer:


This member was all over the board complaining about the Sears "Lifetime Warranty" on Tools.


He
ended up connecting with the VP of Tools through the site, something that would be impossible
without utilizing social media:


http://www.mysears.com/Tools
--
7018/topics/WARRANTY
-
ISSUES/posts


Someone who visited having issues with their
washer:


http://www.mysears.com/Appliances/topics/Kenmore
-
3
-
1
-
CU
-
FT
-
IEC
-
High
-
Efficiency
-
Front
-
Load
-
Washer
-
model
-
42052/posts?page=1


One of the above mentioned "Advisor" that help.


This member who offered his suggestion is
actually a retired service
techinician

who hangs out a bunch on the
site:


http://www.mysears.com/Dishwashers
--
3933/topics/Washer
-
model
-
number
-
665
-
17033402/posts?page=1#post_199551