Introduction to Lean Manufacturing

Module: Causes of Excess Product Costs

Dr. Douglas L McWilliams Department of Industrial Technology College of Technology

What is manufacturing?
The activities of making or processing a raw material into a finished product

What is manufacturing?
Manufacturing includes:
Design Material selection Planning & Scheduling Production Quality assurance Management Marketing

What is manufacturing?
Tier 2 Suppliers Raw Material Suppliers Tier 1 Suppliers Company XYZ

Customers

Manufacturing Supply Chain

What is lean manufacturing

Originated from the Toyota Motor Company. Lean manufacturing is also known as the Toyota Production System It is a management philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities to produce a good or service It involves identifying and eliminating non-value (waste) added activities which increase product cost

How does lean manufacturing classify manufacturing activities?

Value-added
Critical activities to produce the product or service

Non-value added
Essential activities to win the customers business Unnecessary activities that must be eliminated

What are some causes of excessive product cost?

Seven common wastes
Overproduction Waiting Excessive Transportation Inappropriate Processing Unnecessary Inventories Unnecessary Motion Defects

What are the causes of muda?

1. Overproduction
Target and achievement unclear Excessive lead time and storage times

2. Waiting
Operators waiting Operators slower than production line

3. Excessive Transportation
Widely spaced equipment Forklifts not available when needed

What are the causes of muda?

4. Inappropriate Processing
Variability in operators performance Processes not statistically capable

5. Inventory
Large safety stocks Variable procurement lead times

6. Motion
Double handling Non-standard layouts Equipment widely spaced from each other

What are the causes of muda?

7. Defects
Low material yields Excessive process variability

How does lean manufacturing eliminate muda?

Provides a way to specify value Line up value-creating actions in the best sequence Conduct these activities without interruption Produce them whenever someone request them Perform them more and more effectively

What are the five basic principles of lean manufacturing?

1. 2. 3. 4. 5. Value Value stream mapping Flow Pull Perfection

What are the benefits of lean manufacturing?

Concept Inventory Ideal EOQ People Utilization Work Scheduling Labor Costs Work Groups Accounting Quality Traditional Asset Large High Build to forecast Variable Functional departments Traditional End of process Lean Waste One Varies Build to demand Fixed Cross-functional teams Throughput On-line process

What are the benefits of lean manufacturing?

Key Element Travel Distance Queues Throughput Time Inventory Turns Supervision Quality Feedback Skill Range Scheduling Equipment Utilization Traditional 500'-4000' 12-30 Weeks 3-10 Difficult Days Narrow Complex 85%-95% Lean 100'-400' 3-5 Hours 15-60 Easy Minutes Broad Simple 70%-80%

What are the benefits of lean manufacturing?

Performance Inventory turnover Lead time Setup time Lot size Production rate Machines/operator Improvement initiatives GM 4 3 months 4 hours 5000 Standard 1 Top-down Toyota 200 2 days 10 minutes <100 Takt 5 Bottom-up

Drive

MTS

MTO

What are the results of lean manufacturing?

Lead Time reduced by 90% Productivity increased by 50% Work-In-Process reduced by 80% Quality improved by 80% Space Utilization reduced by 75%

Acknowledgments
The author wishes to acknowledge the support from the Society for Manufacturing Engineers - Education Foundation, SME-EF Grant #5004 for Curriculum Modules in Product Lifecycle Management.