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LEAN and AGILEapproaches to manufacturing
and process improvement
Dr Peter Ball
Centre for Strategic Manufacturing
www.dmem.strath.ac.uk/csm/[email protected]
Centrefo
rStrategicManufacturing
DMEMDMEM
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The frog!
Rebbit!
OoC
5OoC
10OoC
Uh oh!Rebbit!
Poikilothermic (= dont try this at home)
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A Lean and Agile Manufacturing
What are they?
What are the benefits? How to do it?
Case studies
Sources of further information
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Lean Thinking roots in Toyota Philosophy
Doing it all for the Customer
Levelled production Pull system
Continuous-flow production
Takt time
Multi-skilling
TQM
TPM
Poka Yoke
SPC
Standardised work
Kaizen
workcentre
workcentre
K K
store
replacement batches
kanbanswithdraw & process
Item Qnty Day 1 Day 2 Day 5
Runner 100 20 20 20
Repeater 27 7 7
Stranger 5 5Load 132 27 27 25
Capty 135 27 27 27
Uncompetitive Competitive
Competitiveness
Time
time
Upper action limit
Upper warning limit
average
action?
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What is Lean Manufacturing?
Builds on roots but with specific focus on:
Lead time reduction
Regular production
New products
Flexibility improvementVariability reduction
Cost reduction
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Lean Characteristics & Benefits
Characteristics Benefits (higher )
Customer Driven
Profit Driven
Team Based
Fewer Players
Devolved responsibility
Customer Satisfaction
Profitability
Greater Control
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Improving business performance
Increase turnover
Sell more
Charge more
Reduce cost
Reduce direct material cost
Improve production efficiency/effectiveness
Increase the rate of adding value
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Time based competitiveness - some rules
0.05 to 5
Value actually added between 0.05% - 5% of total time
Source: survey of industry (by Boston Consulting Group?)
3 / 3
Why no value being added:
Waiting for completion of batches
Waiting for physical / intellectual rework
Waiting for management decision
3 x 2
Lean competitors enjoy x3 avg growth rate, x2 profit margin
1/4 - 2 - 20
For every quartering of total time, productivity doubles,
costs reduce by 20%
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What is World Class Manufacturing?
Being the best
Being the lowest
cost producer
Delighting the
customer?
Schonbergersagenda?
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What is World Class Manufacturing?
Product quality right
first time, every time
Reduction of waste in
the manufacturing
system
Flexibility & control to
satisfy customer ontime, every time
Managing through
people, teams and
aligning all to goals
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How to go lean
Objective Method
Understand customers and
what value they want
Setting the direction,
targets and checking
results1
Define the internal value
stream
An internal framework for
delivering value2
Eliminate waste, make info
& products flow, pulled by
customer needs
Appropriate method to
make necessary change3
Extend the definition ofvalue outside your
company
Externalise the value focusto the whole value stream
4
Continually aim for
perfection
Strive for perfection in the
product and in all
processes and systems5
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Cornerstone of Lean Manufacturing
Value stream mapping
Construct process map of the value stream
Avoid using existing maps, may be out of date or have
misconceptions
Analyse the process map
Focus on customer
Identify value-added and non-value-added activities Calculate the value-add ratio
Reduce and eliminate wasteful steps
(several value streams exist in a value chain,
e.g. key product line to key customer)
Many mapping tools (process activity,
supply chain response, quality filter, etc.)
Conduct all improvements in context of value-add ratio
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Example of process map
Note value-add time -vs- lead time
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Demand amplification mapping
Many tools exist including demand amplification
mapping
Concerned with batching and response time
Spreadsheet example from IOM publication shows
effect
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Capability of processes and the dangers
Need to establish capability in all processes
Need capable machines
Need capable suppliers
etc.
Danger is that you can base lean on poor foundations
Focus on assembly area when machine shop is not capable
Focus on production processes when supplier is notcapable
Need to be careful with available literature, can assume
You have sales and operations planning
You have capable machines
etc.
If your production planning function was likely
to produce infeasible plans occasionally wouldyou trust them?!
See roots of lean
thinking slide
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Capability / variance
Variation of output of a process can give rise to defects
internally and/or passed onto customerAim to reduce process variation to increase reliability of
a process
This is the foundations of Six Sigma methodology
Nominal
Upper
specificationlimit
Lower
specificationlimit
3s
6s
Defects 1350 parts per million
Defects 0.001 ppm
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Six Sigma
A complete methodology for improving the business or
simply a process reliability concept?
Key to Motorola, GE and other businesses at all levels
Executive vision
Assess & kickoff
Deploy strategy
Measurement
Analysis
Improvement
Control
Select champions
Train and set up structure
Map, id critical input/output variables
Determine variance
Design of experiments
Use control charts
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Agilea step on from lean?
Roots of agile in America defence industrydeveloping the ability to react and reorganise to
successful equipment bidsLean and agile have common components
See Lean Thinking Roots slide (quality, reliability,improvement, etc)
But lean is process focused, agile is boundary focused
Ability to thrive in constant, unpredictable change
Key attributes of agile Customer value focus (solutions not products)
Flexibility to adapt to fundamental market changes
Not simply changes in product mix Competing from multiple fronts, possibly virtually
Organisational knowledge, including ability to adapt ITsystems to support new processes
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Different views on lean -vs- agile
Traditional Lean Agile
The journey
Lean Agile
Make to stock
Low variety
Mass, repetitive
Cost minimiser
Make/Engineer to order,
High variety, Service culture
Product Innovator?
Customer intimate?
A spectrum of companies
ComplementaryStock
(to decouple)
Lean AgileMaterialsuppliers
customer
Make to forecas t Make to order
Upstream variat ion Downs tream variat ion
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Establishing Foundations for Lean, Agile
Need the classic pre-requisites for any programme
Strategy
Commitment
Objectives
Communication
Empowerment
Establish framework
Activity plan, cost, time and execution
Measurement and evaluation system
Culturechange
Use of
champion
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Key to Lean Manufacture is measurement
Need clear, objective focus on value
Example: OEE (Overall Equipment Effectiveness)A composite measure of the ability of a process to carry out
value adding activity
OEE = % availability x % output achieved x % perfect output
If change to a process increases OEE it is worthwhile
Actual Available Production Time
Theoretical time minus planned downtime and shutdowns
This is the realistic best available production time (100%)
Planned Downtime
PM, Shutdowns,
Holidays
Machine Running Time
Actual production hours minus downtimes
This is possible production if 100% performance
Unplanned Losses
Breakdowns, HR,
Set-up time
Availability
Net Operating Time
Machine speed against theoretical speed
This is the possible output if 100% quality
Speed losses
Idling, minor
stopages
performance
Performance
Useful Production Time
Material in minus product out
This is the real output
Quality Losses,
adjustments, Set-up
waste
Quality
OEE
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OEE Example Calculation
Performance
G. Total dozens produced = 3869 dozen
H. Balanced Speed (180 BPM=0.067) = 0.067
I. Performance (HxG / Ex100) = 85%
Quality
J. Rejects during operating time = 20 dozen
K. Rate of quality products (G-J / Gx100) = 99%
Overall Equipment Effectiveness
OEE (F x I x K / 10000) = 52%
Loading Time
A. Working Time = 525 mins
B . Line Off Time = 30 minsC. Loading Time (A-B) = 495 mins
Line Off Time
Lunch break 30 mins
Asset Care 0 mins
Availability
D. Downtime = 190 mins
E. Operating Time (C-D) = 305 mins
F. Availability (E divided by C x 100) = 62%
Downtime
Start up 30 mins
Shut down 20 mins
Breakdown 40 mins
Changeovers 90 minsMaterials Supply 10 mins
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Cost benefit analysis
Costs Benefits (higher )
Investigation
Implementation
Project specific
Customer Satisfaction
Profitability
Greater Control
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Summary
Strategy that encompasses business [profit] objectives
and customer order winning [and maintaining]
criteria
Achieve short-term, KPI-driven improvements
consistent with strategy
Plan and act for sustainable change
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Example: Rolled metal manufacture (batch)
Major initiative to remove waste
Significant formal education and training
Targeted specific product stream
From supplier to customer
Mapped out processes and established measures
Result
Major quality improvements, 60% drop customer complaints
Other significant financial benefits
Short / long term EVA moved negative to neutral
(EVA=Economic Value Add -> sustainable investment)
Openness of data systems!
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Example: Bottled water (process)
Phase 1
Education and training of teams
Use of DTI funding via TCS Programme (tcd.co.uk)
Full integration of sales, purchasing, manufacturing
Improved management information system
(Soft) greater teamwork, responsiveness
From 80% to 100% peak season stock cover
Sales up 30%, same headcount
Phase 2 (underway)
Production processes focus
Introducing OEE Focus on waste
CI, include quick changeovers
Ambitious, achievable targets
Self-managed work teams
DEPALLETISER
TOPSTAR/DUBUITT
RINSER
FILLER
CAPPER
LABELLER
OCME (S/wrapper)
HANDLE APPLICATOR
PALLETISER
STRETCHWRAPPER
CASE SEALER
CASE ERECTOR
CASE PACKER
FILLINGH
ALL
BOTTLIN
GH
ALL
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Example: Whisky bottling (process)
Use of OEE as key measure
Specific focus on bottling lines Low OEE
Start / stop
Breakdowns
Introduced asset care
5S Sort, Straighten, Sweep, Standardise, Self discipline
Quick changeovers
Reliability centred maintenance
Asset care programme brought 0.5m savings in 6
months
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Useful sources of information
www.competitiveSCOTLAND.com
Seminars, resources & discussion for Scottish manufacturing
Centre for Strategic Manufacturing web site dmem.strath.ac.uk/csm/ (this presentation, resources, lean courses)
James Womack & Daniel Jones, Lean Thinking: Banish Waste and CreateWealth in your Corporation(Simon & Schuster, 1996)
John Bicheno, The Lean Toolbox, 2nd edn (Picsie Books, 2000)http://www.picsie.co.uk/ (10?)
Peter Hines & David Taylor, Going Lean: a guide to implementation(LeanEnterprise Research Centre, Cardiff Business School, 2000)
Institute of Operations Management (IOM)
Papers and courses on Lean, Agile, etc, see iomnet.org.uk
Seminars (e.g. Recently: Lean at Boots, 5S at Ratheon)
Pande, Neuman, Cavanagh, R.R. 2000 "The Six Sigma Way, McGraw-Hill
ISBN 0-07-135806-4 (20) For knowing about it without actually dealing with the detail
Breyfogle 1999 "Implementing Six Sigma - Smarter Solutions UsingStatistical Methods" Wiley-Interscience ISBN 0-471-29659-7 (60)
Good for detail if you actually want to implement it
Agile
http://www.agility.co.uk/ or internet search for agile (care with agility!)
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LEAN and AGILEapproaches to manufacturing
and process improvement
Dr Peter Ball
Centre for Strategic Manufacturing
p d ball@strath ac uk
CentreforStrategicManufacturing
DMEM
These slides can be downloaded from:www.dmem.strath.ac.uk/csm/
Rebbit!