Lean Manufacturing

TPS
Article: Decoding the DNA of the Toyota
Production System, Harvard Business
Review, Sept-Oct, 1999.

Article: Lean Knowledge Work, Harvard

Business Review, Oct-2011
Minus-Cost Principle
Cost + Profit = Selling Price
Toyota Production System
(Lean Manufacturing)
 Taiichi Ohno (1912-1990), Toyota
executive pioneered the concept
 To do more and more with less and less
 Less human effort
 Less equipment

 Less time

 Less space

 Less capital
Lean Production
(Levels of Abstraction)
 Lean production has been described at
three levels
1. Philosophical perspective
A. Elimination of waste (Womack and
Jones,1996)

2. Implementation of tools and techniques

3. System design using three rules

What is Waste?
• Waste is defined as any activity that does not add value
to a product from customer’s perspective.
• Studies have shown that as little as 5% of total
throughput time is actually spent directly adding value. In
other words, 95% of its time, an operation is adding cost
to the product.
Fujio Cho, Toyota’s president defined
 “Anything other than the minimum amount of
equipment, materials, parts, and workers essential for
production”
Seven Categories of Muda

 Muda means Waste

1. Overproduction
2. Unnecessary Inventory
3. Transportation
4. Over Processing
5. Waiting
6. Unnecessary motion
7. Product Defects
Overproduction
Unnecessary Inventory
Unnecessary Inventory
 8

Reducing Inventory
Assume the
river is
inventory.

As long as the river (the inventory)

covers the rocks, the (production)
problems are hidden.

Source: Douglas Cloud, 2004

 9

Reducing Inventory

If the river (inventory) is reduced,

the problems are exposed.

Machine
breakdowns
Poor Untrained
Unreliable
quality employees
suppliers

Source: Douglas Cloud, 2004

Transport
Waiting
Unnecessary Motion
Overprocessing
Defects
How Time is Spent by a Typical Part in a
Batch Production Machine Shop
Time on M/c Moving and Waiting
Time in
factory
5% 95%

30% 70%
Time on m/c

Cutting Loading, positioning,

gauging
Activities
 Value-added
 Makes a product more complete

 Non-value-added
 Does not add value in the customer’s eyes
and customer unwilling to pay

 Required non-value-added
Value-added Activity
 An activity that makes a product a more
complete product, in the eyes of the customer

 The value is defined from customer’s point of

view

 End result is the receipt of cash for our actions

Non-Value Added Activity
 The activity that consumes time and resources
but does not advance the product to a more
complete or finished state. Adds no value in
the customer’s eyes and that customer is
unwilling to pay for

 Seven categories of waste

 Overproduction, unnecessary motion, transport,
process, waiting, unnecessary motion
Basic Words
 Seven forms of waste composed of non-
value added activities, add cost

 The value added activities, generate

revenues
Required Non-Value Added
Activity
 Activity for which the customer is likely to
pay

 We can change and improve the method

of performing these activities
 Components of
Lead Time

Start of production End of production

for a single item for a single item

Conversion Time Wait Time Move Time Down Time

Value-added Nonvalue-added

Total Lead Time

Exercise
 Can you identify wastes in your previous
organization?
 How can we
reduce non-value
added activities?

Source: Douglas Cloud, 2004

Value Stream Map
Walking and drawing the processing steps
(material and information) for one
product family from door to door in your
plant
Value stream map
• Also known as “end-to-end” system mapping
• Effective approach to understand flow of
materials, customers, and information
• Focuses on value-added activities and also non-
value added activities
• Starting point to recognize waste and identify its
causes
Value Stream Mapping
 Process mapping tool that enables all
stakeholders of an organization to
visualize and understand a process

 To differentiate value from waste

 Eliminate waste

Chinese Proverb: “One picture is worth ten thousand words”

Value Stream Mapping Steps
To maximize value and eliminate waste
1. Form inter-disciplinary team
2. Mapping the current key process how it actually
operates
 Identify value added and non-value added activities
 Eliminate non value added activities using Kaizen
(continuous incremental improvement)
3. Develop future state value stream map
VSM in a Hospital
Takt Time
Available work time
per day
Takt Time = --------------------------------
Customer demand rate
per day
TPS Terminologies
Ways to Eliminate NVAs
 Rearranging sequence
 Consolidating process steps
 Changing work methods
 Change type of equipment
 Redesigning forms and documents
 Improving operator training
 Eliminate unnecessary steps
Toyota Production System
 Multiple explanations for Toyota’s
success:
 Eliminationof waste
 Using specific tools for production
 Design Rules
Lean – Tools and Techniques

1. Pull Systems
2. Cellular Layout
3. Uniform Plant Loading (Heijunka)
4. Small lot sizes
5. Minimized set-up times
6. Kanban Systems
7. Quality at source (Poka-Yoke)
8. Flexible Resource
9. Total Productive maintenance
10. 5S
1. Traditional Production
1. Continuous Flow
(One-piece flow)
1. Pull vs. Push (Traditional)

 Pull Method: A method where customer demand

activates the production of service or item. Work
releases are authorised

 Push Method: A push method where the

production of the item begins in advance of
customer needs. Work releases are scheduled
1. Pull Systems
2. Cellular Layouts
 Cells group dissimilar machines to process
parts with similar shapes or processing
requirements
 2. Cellular Layout
Process (Functional) Layout Group (Cellular) Layout
A cluster
or cell
T T T CG CG T T T
M
T T T SG SG M M T

D D M D
M M D D D
SG CG CG D

M M D D D SG

Similar resources placed Resources to produce similar

together products placed together
3. Uniform Plant Loading
(Heijunka)
Mixed model production
LEVELLED PRODUCTION
Levelled production means producing various models on the same
production line to cater the customer demand. See the following diagram.
The various products are shown in the form of different geometrical shapes.
Assume they are different models of vehicles being produced on the same
production line.

Production leveling is done by finding the ratio of demand of various models.

Instead of producing batches of the same model, mix models are produced
on the same production line according to the ratio of their demand in the
market. This is how customers do not have to wait for long and throughout
the month all the customers are served equally well
Uniform Plant Loading (Maruti)
Tata Motors Plant
4. Small Lots
 Use lot sizes as small as possible
 Advantages
 Average level of inventory less
 Pass through the system faster
 Quality problems are detected fast
 Easier to schedule

 Disadvantage
 Multiple set ups
5. Minimized Set up Times
 Small lot sizes to make mixed models
 Japanese workers: 800 T, time: 10 mins
 US workers time: 6 Hrs
 German workers time: 4 Hrs
 Set Ups
 Internal (Done when m/c is stopped); disruptive
 External (Done when m/c is running)
 Convert internal to external set ups
 Abolish the setup itself (uniform product design)
 Single Minute Exchange of Dies (SMED)
 6. Kanban System

Kanban post
7. Quality at Source
 Emphasis on eliminating defects at their origination points

 Workers act as inspectors

 Jidoka (the authority of the workers to stop the line if quality problems
encountered)

 Andons or call lights

 Each worker given access to andons to seek help.

 Visual control of quality

 Poka-Yoke
 Are either warnings that signal existence of a problem or controls
that stop production until the problem is resolved
 Minimize human errors
 http://facultyweb.berry.edu/jgrout/everyday.html
Poka-Yoke Example
8. Flexible Resource
 Multifunctional workers
 General purpose machines
9. Total Preventive Maintenance
(TPM)
 An emphasis on preventive maintenance
 Avoid equipment breakdown, conduct frequent
inspection, lubrication of machines etc.
 Allocation of time each day for maintenance or set
aside time specific time each shift
 Operator responsibility for maintenance
 Trained to perform all but the most complicated
maintenance on the machines they operate
9. Total Productive Maintenance
(TPM)
 Eliminating causes of machine failure
 Maximizing effectiveness of machine throughout
its entire life
 Central to TPM is the concept of Overall
Equipment Effectiveness (OEE)
10. 5 Elements of 5S
1. Sort: Remove all unnecessary material
and equipment
2. Straighten: Make it obvious where
things belong
3. Shine: Clean everything, inside and out
4. Standardize: Establish policies and
procedures to ensure 5S
5. Sustain: Training, daily activities
Note: Some add 6thS for “safety”
4S: Place for Cleaning Supplies
4S: Equipment Storage Area
4S: Peg Board for Tools
4S: Hazardous Waste
Measuring and Tracking 5S
Toyota Production System
 Multiple explanations for Toyota’s
success:
 Eliminationof waste
 Using specific tools for production (SMED,
Poka Yoke)
 Design Rules
TPS
Article: Decoding the DNA of the Toyota
Production System, Harvard Business
Review, Sept-Oct, 1999.

Article: Lean Knowledge Work, Harvard

Business Review, Oct 2011
Toyota Production System
(Design Rules)
 Design Rules to design work processes
 Activity
 Connections
 Pathways
Rule 1: Activity
 All work shall be highly specified as to
 Content
 Sequence
 Timing
 Outcome

Specified Tasks
Rule 2: Connections
 Every customer-supplier connection must
be direct and there must be an
unambiguous yes-or-no way to send
requests and receive responses

Streamlined communication
Rule 3: Pathways
 The pathway for every product and service
must be simple and direct

Simple process architecture

Rule 4: Scientific Problem Solving

 Any improvement must be made in

accordance with the scientific method,
under the guidance of a teacher, at the
lowest possible level in the organization

Hypothesis-driven problem solving

 What usually happens

If worked to the
new standards
Improvement

Innovate
Innovate

“Actual”

Adapted from: Imai, “Kaizen” Time

Continuous Improvement
A3 Problem Solving: The Toyota Way
5 Whys Approach
 A workstation starved for work
Why starved? A pump failed
Why pump failed? It ran out of
lubricant
Why it ran out of lubricant? A leaky
gasket not detected
Why leaky gasket not detected?
Lack of training
5 Whys Approach
 My car is not starting.
 Why? The battery is dead?
 Why is the battery dead? The alternator is not
functioning
 Why is the alternator not functioning? The alternator
belt has broken
 Why the alternator belt broke? It was well beyond its
service life
 Why used belt beyond service life? The vehicle not
maintained according to recommended service
schedule (root cause)
Three Rules
 What kinds of wastes are eliminated?
Questions
Do principles of lean production apply to knowledge work?

How can we extend the existing framework of lean

production to a new context that differs substantially from
that in which lean was observed?
Article: Lean Knowledge Work
 Six principles
1. Eliminate waste
2. Specify work
3. Structure communications
4. Address problems quickly and directly
5. Plan for incremental journey
6. Engage your managers
Article: Lean Knowledge Work
Questions:
• Can you identify wastes in IT sector
• Is all knowledge tacit in IT?
• Can some of this knowledge be made explicit?

• Is some of the knowledge work repeatable?

• Do knowledge work have some commonality that can be

standardized and be specified (develop protocols)?
• Can the specified knowledge be improved scientifically?
• Who fixes the problem, manager or the person closest
to the work?
• How soon the problems were resolved?
Article: Lean Knowledge Work
Wastes identified in IT sector
 Overproduction: How many reports created that nobody reads?
 Waiting: How long you waited for a scheduled meeting or a
decision from your boss, or for a hardware?
 Defects: How much rework that you did while developing a
software
 Over-processing: How many extra features in the software you
may have provided that the customers may not have asked for?
 Inventory: Unnecessary emails you may have created?