GB 01.

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Lean Overview

Prepared By ： TT Tang （ BB Office)

Prepared Date: 2011.4.7
Lean Overview

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What is the LEAN?
lean : adj.
1 a: lacking or deficient in flesh
b: containing little or no fat
2: lacking richness
3: deficient in an essential or important quality or ingredient
Mass Production Evolution

Industrial Revolution-Workman

Before 1800-Universal

Universal-Mass

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Typical Shop Floor

Mass

Standardization

Large-Batch

Long time to delivery

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Why Mass production ？

Demand>Output

Customers have to lose some choice

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Lean enterprise-urgent market

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The limitation of Mass production

Confine customers’ choice

Less flexibility , less reaction

Expensive wastes, less competitiveness

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Manufacturing Evolution
Henry Ford
 Assembly line mass production
 Produce in high volume with
low variety
 Single skill

Toyota Production System (TPS)

 Just-In-Time Production (produce
only what is needed)
 Pull System
 High variety to meet customers
wants
Previous simple flow

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Current complicated process

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What is Lean?
Companies using Lean methods use less of
everything ：
 Less Human Effort
 Less Space
 Less Investment in Tools
 Less Engineering Cost to Develop Products in
Less Time
 Less Inventory
Lean Opportunities
Things to address ：
 High Inventory
Large Batch Production
 Redundant Inspection
 High Rework & Scrap Costs
 OTD Not Consistently Met
 Poorly Utilized Manpower
 Low Machine Utilization
 Production Pushed (Not Pulled by Customer)
MUDA – hidden factory of poor quality

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Types of Wastes ：
Seven Types of Waste (Muda)
Excess Inventory
Overproduction
Producing Defects
Over processing
Waiting (Idle Time)
Transportation
Needless Motion
Excess Inventory
May be raw material, WIP or finished goods
Symptom of hidden problem
Increases costs and lead time

1.0 Inventory
Any more than the minimum to get the job
done
Examples: - Processes producing more than the downstream operations
can handle
- Large batches of WIP stored away from work stations
- Build for Productions’ convenience, not per customer demand

Improve production control system and commit to reduce

unnecessary "comfort stocks"
Overproduction
 Overproduction can prevent other essential activities from
taking place
 Overproduced items need to
be stored (inventory) and
create further waste
2. Over production
Producing too much, or too soon

Examples: - Running one workstation faster than another workstation

- Producing excess quantities just in case there are rejects
- Running production where there is no customer demand
- Excessive production of one specific model

Produce only what the customers want when they want it

Producing Defects
 Scrap/Rework is failure to "do it right
the first time"
 Causes can be methods, materials,
machines or manpower
3. Defects
 Requires additional resources to store, disposition and
Any non-compliant production

document
Examples: - Poor work instructions
- Operators did not follow procedures
- Poor material handling system (causing damage)
- Running process settings outside of established limits

Analyze and solve root causes of scrap and rework

Over processing

May result from internal standards that do not reflect

true customer requirements
Often arises where standards are difficult to define
May be an undesirable effect of operator’s pride in their work
Examples: -Reworking a condition that is acceptable by specification
- Multiple inspections due to lack of confidence
- Preparing reports nobody uses

Provide clear, customer-driven standards for every process

Waiting (Idle Time)
• Many machines do not need supervision
• Essential wait time can be filled productively
5. Waiting
Examples: - Waiting for all the participants to arrive to start a meeting
Waiting on parts, waiting for a
machine to finish cycle
-Waiting for material to be sent to the work station
- Waiting for a technician to set-up a machine
-Waiting to get needed signatures on paperwork

Rebalance activities to remove waiting, then make

essential waiting visible
Transportation
• Result of a poor system design and/or layout

• Can create handling damage and cause

production delays
Examples: -Long distances between work stations 6. Transport
Any nonessential transport is
- Product travels back and forth across plant waste
- Walk up and down to get one item at a time

Relocate processes, then introduce

standard sequences for transportation
Needless Motion

• Often seen as “they way we do it”

4. Motion
• Result of a poor work station design/layout Any motion that does not add value

Examples: -Frequently used items are located furthest from operators

-Computer screen is placed too high up for easy viewing
- Hand placed materials not in suitable location or dispenser

Arrange people and parts around stations with work content

standardized to minimize motion
MACHINES

No ONE-WAY Machines No Dinosaur Machines

Bring the part back to the operator We know what happened to the dinosaurs
Use Equipment Necessary to Permit One Unit Flow
Keep Height of all Items in the Workplace Very Low
Batch Production VS. One Piece Flow
$ Raw Material
$

$
$
$
$ $

Finished Goods $

Add Value to the Product Continuously Through the Process

Pushing Pulling

Which is smoother?
Machines Machines

Don’t attach Roots and Vines to Machines

Make them easy to relocate
Equipment Construction and Layout should permit easy material flow.

Standard Work
①
②
③
④

Entr
y

Exit

Material
s
Perfect
Six Sigma

Pull

Flow
VSM
Value Stream

Visual Factory
5-S
What’s Lean
Lean has several levels:

1. Value – We have to reduce non value-added time 。

2. Value stream- Optimize value stream
3. Flow – Smooth flow
4. Pull
5. Perfect –Have the best choice to do work
6. Agility– Prompt

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Value
[Value Add (VA)] activities:

• Customer pay for it

• Do it right at the first time
• Be changed

[Business Value Add (BVA) ] is based on operation or

principles’ required activities.

[Non Value Add (NVA)]:any other activities except VA or

BVA. NVA is called waste or MUDA.

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[VA or NVA] ?

Identify the following activities VA/NVA:

Rework
Painting
Inspection
Installation
Production Fixtures
[Revision Change Control]

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Hidden Factory

OK
Inputs Operation Inspect Final Test
Yield
NOT
Rework OK
Hidden Factory
Scrap

Activities in hidden factory is NVA, which will

be reflected in finished good.

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Value Stream

Value stream is linkage between process activities.

To know more about materials and information.
VSM is used to understand flow, and provide
process information , including VA&NVA.

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Characteristics Of A Good Workflow Value Stream Process

• Has a defined customer and supplier

• Delivers a defined work product or service
• Has defined and measurable customer requirements
• Adds value to the business and to our customer
• Satisfies the customer
• Has a recognizable owner

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Flow

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Flow

Bad flow is shown as ：

Too long time to delivery

Excess inventory

No quick reaction for customer demand changed

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Flow

Good Flow has :

Small batch

No NVA

No Scrap

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Flow

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Flow

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Pull

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Perfect

When we finish 1-4 steps , which totally purges the

whole flow, in the phrase , Six Sigma could help us
understand and improve whole process , optimize and
keep profit.
That’s the relationship between Lean and Six Sigma.

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Lean Implementation

Six Sigma
Perfection

Pull

Flow
Value Stream
Value

Visual Factory
5-S

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5S Principles

Sort Sort Clutter-ups Seiri

Strengthen Organize work area Seiton

Sweep Clean workshop Seiso

StandardizeStandardize Seiketsu
Sort, Strengthen&Sweep

Sustain Empower, Shitsuke

consign&self-discipline

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Sort
Sorting means “to sort through everything” in each work area.
Keep only what is necessary.
Remove all unnecessary machinery, tools, fixtures, paperwork,
and rubbish
Remove occasionally used items to a storage area outside of the
workplace
Send required but broken equipment and tools to be repaired
Discard obsolete jigs and fixtures, manuals, scrap, and return
excessive raw materials to stores

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Straighten
Organize, arrange and identify all remaining equipment, tools,
etc. in the workplace
Adopt the motto: “A place for everything…and everything in its
place.”
Label cabinets, shelves, book cases, tool storage areas with their
correct contents
Put outlines or shadows on tool boards so that tools get returned
to their place
Paint lines around work stations storage areas etc for proper
identification
Bundle wiring neatly for safety
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Shine

Clean the entire workplace including machinery, tooling,

walls, floors, etc.
Establish a cleaning schedule with daily weekly, and monthly
tasks. Assign responsibilities.
Provide proper cleaning and personal protection equipment
Provide organized storage for cleaning equipment and
supplies
Management must allow time for cleaning activities

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Standardize
Identify 5S best practices
Document best practices, cleaning schedules, and roles and
responsibilities in work instructions
Educate personnel about maintaining standards
Ensure new employees are shown how to maintain standards
from the beginning
Adopt visual management using color coding and signage to
assist in standardization

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Sustain

Resist the human tendency to let things slip back to the status
quo by adopting self discipline
Institute a regular audit program to maintain the gains
Create checklists to focus employees on 5 S priorities
Ensure that responsibilities are clear and communicated to all
Management must continue to support the process and insist on
compliance

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5S benefits
Elimination of dirt and clutter and the installation of a
new sense of order helps organizations to:
improve morale
regain wasted space
reduce costs by improving productivity
reduce waste
reduce equipment down time
improve teamwork and team spirit
improve quality of work and quality of life
improve corporate image
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Boeing 5S Video

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Typical Yield calculation

FTY (Final Test or Final Inspection Yield)

FTY depends on the quantity of defective units reaching final
inspection and the effectiveness of final inspection (detection).

A high number for FTY could be due to a well controlled process or

an ineffective final inspection.

FTY is not a traditional six sigma metric.

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Common process metrics
IPY (In-Process Yield)

IPY is the ratio of units shipped to the next process to the number
of units started in the current process.

235 units started, 210 shipped to next process. IPY =

Sometimes rework is considered and then IPY is the ratio of units

processed with no defects to the number of units started in the
current process.

235 units started, 45 required rework, 25 scrapped. IPY =

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Rolled Throughput Yield

Rolled Throughput Yield (RTY) is the probability

that a single unit can pass through a series of
process steps free of defects.

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Six Sigma process measurement
RTY = IPY1 x IPY2 x IPY3 x . . . x IPYk

RTY (rolled throughput yield) is the chance a unit goes through all
(k) process steps without a defect. To calculate RTY, multiply the
individual process operation yields (IPYs).

IPY1 = 99%, IPY2 = 95%, IPY3 = 90%, RTY =

If a process has ten steps each with an IPY of 98%, RTY =

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Return to hidden factory

Rework Step 1 Scrap

Inputs
15% IPY = 0.82 3%

Rework Step 2 Scrap

Inputs
5% IPY = 0.86 9%
RTY =

Rework Step 2 Scrap

Inputs
5% IPY = 0.91 4%

Final Inspection Yield = 95%

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Rolled Throughput Yield (RTY)

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Six Sigma Process Metrics
IPY6σ = e-dpu

We want to count defects not just defective units (a unit often could have
more than a single defect). From a process point of view, we consider
rework a defect.

If a process has a historical DPU of 0.0513, IPY =

If a process has an IPY of 98%, DPU =

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Defects vs Defectives
A defective unit contains at least one defect.

A defect is a process output that fails to meet a defined

specification (length, color, finish, cycle time, etc.).

An opportunity is anything that change the form, fit or

function of a product. Product opportunities include
parts, features and materials. Process opportunities
include machines, procedures and tools.

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DPU vs DPMO
DPU drives process and product improvement. We focus
on in-process defects rather than final defectives. One
common problem is that traditional inspection often stops
with the identification of the first defect.

DPMO is defects per million opportunities. The DPU is

divided by the opportunities per unit and then this figure is
multiplied by one million.

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Lean Production metrics

Cycle (Working) Time

The cycle time for a process is the time to
produce a unit.
This is estimated by taking the output and
dividing by the total processing time.
Can cycle time contain NVA activities?

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Cycle Time

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Lean Production metrics
Takt Time
The rate at which a finished good is produced. If you have a Takt Time of
two minutes, that means every two minutes a complete PCBA, assembly or
machine is produced off the line.

How is Takt Time established?

The customers buying rate establishes Takt Time. If you manufacture faster
than the Takt Time, you will incur finished goods inventory carrying costs
on goods that you may not have a customer for. If you build slower than
the Takt Time, you will not meet customer demand.

Takt Time = Available Time / Shift or Day (in time units)

Customer Demand / Shift or Day
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Lean Production metrics

Work Cycle Efficiency (WCE)

The percentage of total cycle time represented by
value add activities.

If the total cycle time to produce an assembled

unit is 5 hours, and the value added activities
take a total of 30 minutes, what is our WCE?

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Lean Production metrics

Dock to Dock (DTD) Time

Through one value stream

FIFO rules

Calculate WIP/Output

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Value Stream Mapping

Helps to identify waste and its sources

Illustrates flow between processes

Shows links between material flow and

information flow

Provides a common language

Forms the basis for making changes

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Value Stream Mapping

The simplest flow diagram is to identify VA and NVA

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Value Stream Mapping
Mapping Considerations
Process classification
Flow materials
Flow information
common process data
Customer requirements
Inventory areas

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Value Stream Mapping

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Value Stream Mapping

VSM template
task
inventory
Cycle time
shift
WCE
yield

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Value Stream Mapping

I I I I

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Game Time
We will run a factory to illustrate the application of lean
enterprise.

Our factory makes paper airplanes. We will run this

simulation twice. You will get an opportunity to
improve the process after the first run, so note any
suggestions for discussion afterwards.

We’ll also compare metrics that we’ll collect after each

round.

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Game Roles
4 Operators
1 Production Supervisor
1 Material Handler
1 Raw Material Supplier
1 Customer
2 Timers
All other class members: Wasteologists

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Game Instructions
Each operator will get instructions and practice once
Each Operator sits at a different table in a different part of the room.
Raw Material Supplier – Keep Operator # 1 supplied with sets of 3
Customer – Take delivery of sets of 3 as quickly as they can make them. Classify
them as Accept or Reject in terms of quality.
You will see a Red airplane come through with a set of 2 White planes. Treat it
like a white one and move it in a batch of three. We’ll stop when the customer
gets the Red Airplane.
Timer #1 – Start your clock at the beginning and stop it when the Customer gets
the Red Airplane – You will measure Total Time.
Timer #2 – Start your clock when Operator #1 starts working on the Red
Airplane and stop it when the customer gets the Red Airplane. You will
measure Lead Time for the Red Airplane.

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Game Round 1
We will fold and move airplanes in batches of 3
FIFO at each Operator
Only the Material Handler can move airplanes between
operators – When you have 3 ready, call for the Material
Handler
Each Operator is paid a Bonus on HOW MUCH YOU MOVE
from your station.
The Supervisor cannot touch product – but you are
responsible for Keeping the Customer Happy!
Wasteologists – Look for Opportunities for Improvement.
Ready ? Go !!
Data Collection

The following metrics to be compiled for each round:

Total time to complete order

Cycle time for Red Airplane
WIP
Good airplanes and rejects at customer
Total staff count

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Instructions Round 2

The Customer wants to take delivery of 1 Airplane every 15 Seconds

(Takt Time).
Raw Material Supplier – Keep Operator #1 supplied 1 piece at a time
You will see a Red Airplane come through with a set of two White
planes. Treat it just like a white one and move it in a batch of three.
We’ll stop when the customer gets the Red Airplane.
Timer #1 – Start your clock at the beginning and Stop it when the
Customer gets the Red Airplane – You will measure Total Time.
Timer #2 – Start your clock when Operator #1 starts working on the
Red Airplane and stop it when the Customer gets the Red Airplane –
You will measure Lead Time for the Red Airplane.

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Small Lot Sizes
We have seen that reducing lot sizes has a great effect on
inventory levels.

While the advantage of this approach is clear, we rarely run

with lot sizes of 1.

What prevents us from adopting smaller and smaller lot

sizes?

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Lead time break down

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Set-Up Reduction

Actual
Preparing Change
Machine for over
Change
over 5%
Preparation 15%
and
Function
Checks
30% Running
First Part
and
Adjustments
50%

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Set-Up Reduction

Reduce changeover times by:

Keeping all needed items at hand
Using standard sizes of dies, molds, etc. to minimize machine
adjustments
Keeping work instructions available
Making first quality checks as soon and as close to the machine as
possible
Doing as much in advance as possible

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Set-Up Reduction

Reduce changeover times by:

Separate internal and external time
Remove obvious waste
Transfer internal time to external time
Remove adjustment activities
Reduce internal times

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Buddy Checks

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Lean enterprise– baseline

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