Centre for Strategic Manufacturing

LEAN and AGILE

approaches to manufacturing
and process improvement

Dr Peter Ball
Centre for Strategic Manufacturing
www.dmem.strath.ac.uk/csm/
p.d.ball@strath.ac.uk
DMEM
The frog!

Rebbit! Uh oh!
Rebbit!

10OoC

5OoC

OoC

“Poikilothermic” (= don’t try this at home)

A Lean and Agile Manufacturing
 What are they?
 What are the benefits?
 How to do it?
 Case studies
 Sources of further information
Lean Thinking roots in Toyota Philosophy
 Doing it all for the Customer Item
Runner
Qnty
100
Day 1
20
Day 2
20
Day 5
20
Repeater 27 7 7
 Levelled production Stranger 5 5
Load 132 27 27 25

 Pull system Cap’ty 135 27 27 27

store
 Continuous-flow production K K kanbans withdraw & process

 Takt time work

centre
replacement work
centre
batches

 Multi-skilling
 TQM Upper action limit

average
Upper warning limit

 TPM time

 Poka Yoke action?

Competitiveness

lf
 SPC Se nt
em
e
prov
im r
ous ompetito
 Standardised work Co
ntinu C

 Kaizen
change
Present
Uncompetitive Competitive
Time
What is Lean Manufacturing?
Builds on roots but with specific focus on:

Lead time reduction

 Regular production
 New products
Flexibility improvement
Variability reduction
Cost reduction
Lean Characteristics & Benefits
Characteristics Benefits (higher …)

Customer
CustomerDriven
Driven

Profit
ProfitDriven
Driven Customer
CustomerSatisfaction
Satisfaction

Team
TeamBased
Based Profitability
Profitability

Fewer
FewerPlayers
Players Greater
GreaterControl
Control

Devolved
Devolvedresponsibility
responsibility
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
Time based competitiveness - some rules
0.05 to 5
 Value actually added between 0.05% - 5% of total time
3/3
 Why no value being added:
Waiting for completion of batches
Waiting for physical / intellectual rework
Waiting for management decision

1/4 - 2 - 20
 For every quartering of total time, productivity doubles, costs reduce by 20%

3x2
 Lean competitors enjoy x3 avg growth rate, x2 profit margin

Source: survey of industry (by Boston Consulting Group?)

What is World Class Manufacturing?

Being the best

Delighting the
customer?

Being the lowest

cost producer
Schonberger’s
agenda?
What is World Class Manufacturing?

Flexibility
Flexibility&&control
controlto
to
satisfy
satisfycustomer
customeronon
time,
time,every
everytime
time

Managing
Managingthrough
through
people,
people,teams
teamsand and
aligning
aligningall
allto
togoals
goals

Reduction
Reductionofofwaste
waste
ininthe
themanufacturing
manufacturing
system
system

Product
Productquality
qualityright
right
first
firsttime,
time,every
everytime
time
How to go lean

Objective Method

Setting the direction,

Understand customers and
1 targets and checking
what value they want
results

Define the internal value An internal framework for

2 stream delivering value

Eliminate waste, make info

Appropriate method to
3 & products flow, pulled by
make necessary change
customer needs
Extend the definition of
Externalise the value focus
4 value outside your
to the whole value stream
company
Strive for perfection in the
Continually aim for
5 product and in all
perfection
processes and systems
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
Many
Manymapping
mappingtools
tools(process
(processactivity,
 Analyse the process map supply
activity,
supply chain response, quality filter,etc.)
chain response, quality filter, etc.)
Focus on customer
Identify value-added and non-value-added activities
 Calculate the value-add ratio
 Reduce and eliminate wasteful steps

Conduct all improvements in context of value-add ratio

(several value streams exist in a value chain,

e.g. key product line to key customer)
Example of process map
 Note value-add time -vs- lead time
Demand amplification mapping
Many tools exist including demand amplification
mapping
Concerned with batching and response time
Spreadsheet example from IOM publication shows
effect
Capability of processes and the dangers

IfIfyour
yourproduction
productionplanning
planningfunction
functionwas
waslikely
likely
totoproduce
produceinfeasible
infeasibleplans
plansoccasionally
occasionallywould
would
you
youtrust
trustthem?!
them?!
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 not capable
Need to be careful with available literature, can assume
 You have sales and operations planning
 You have capable machines
See roots of lean
 etc. thinking slide
Capability / variance

Lower Upper
specification specification
limit limit

Defects 1350 parts per million

Defects 0.001 ppm

Nominal

±3σ
±6σ

Variation of output of a process can give rise to defects

internally and/or passed onto customer
Aim to reduce process variation to increase reliability of
a process
This is the foundations of Six Sigma methodology …
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
Executivevision
vision

Assess
Assess&&kickoff
kickoff Select champions …

Deploy
Deploystrategy
strategy Train and set up structure …
Pr

Measurement
Measurement Map, id critical input/output variables …
oj
ec
ti
m

Analysis Determine variance …

pl

Analysis
em
en
ta

Improvement
Improvement Design of experiments …
tio
n

Control
Control Use control charts …
Agile – a step on from lean?
Roots of agile in America defence industry – developing
the ability to react and reorganise to successful
equipment bids
Lean 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 IT systems
to support new processes
Different views on lean -vs- agile
The journey
Traditional
Traditional Lean
Lean Agile
Agile

A spectrum of companies
Lean
Lean Agile
Agile
Make to stock Make/Engineer to order,
Low variety High variety, Service culture
Mass, repetitive “Product Innovator”?
“Cost minimiser” “Customer intimate”?

Complementary
Make to forecast Make to order
Stock
(to decouple)
Material
suppliers
Lean
Lean Agile
Agile customer

Upstream variation Downstream variation

Establishing Foundations for Lean, Agile …
Need the classic pre-requisites for any programme
 Strategy
Culture
 Commitment change
 Objectives
 Communication
 Empowerment
Use of
 Establish framework champion
 Activity plan, cost, time and execution
 Measurement and evaluation system
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 Planned Downtime
Theoretical time minus planned downtime and shutdowns PM, Shutdowns,
This is the realistic best available production time (100%) Holidays

Machine Running Time Unplanned Losses

Actual production hours minus downtimes Breakdowns, HR, Availability
This is possible production if 100% performance Set-up time

Net Operating Time Speed losses

Machine speed against theoretical speed Idling, minor Performance OEE
This is the possible output if 100% quality stopages
performance

Useful Production Time Quality Losses,

Material in minus product out adjustments, Set-up Quality
This is the real output waste
OEE Example Calculation
Loading Time
A. Working Time = 525 mins Line Off Time
Lunch break 30 mins
B . Line Off Time = 30 mins
Asset Care 0 mins
C. Loading Time (A-B) = 495 mins
Availability Downtime
Start up 30 mins
D. Downtime = 190 mins
Shut down 20 mins
E. Operating Time (C-D) = 305 mins Breakdown 40 mins
F. Availability (E divided by C x 100) = 62% Changeovers 90 mins
Materials Supply 10 mins
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%
Cost benefit analysis
Costs Benefits (higher …)

Investigation
Investigation Customer
CustomerSatisfaction
Satisfaction

Implementation
Implementation Profitability
Profitability

Project
Projectspecific
specific Greater
GreaterControl
Control
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
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!
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
DEPALLETISER
 Sales up 30%, same headcount
TOPSTAR/DUBUITT

Phase 2 (underway)

FILLING HALL
RINSER

 Production processes focus

BOTTLING HALL
FILLER
CASE ERECTOR
 Introducing OEE CAPPER CASE SEALER
 Focus on waste LABELLER CASE PACKER

 CI, include quick changeovers OCME (S/wrapper)

 Ambitious, achievable targets HANDLE APPLICATOR

 Self-managed work teams PALLETISER

STRETCHWRAPPER
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
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 Create
Wealth 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 (Lean
Enterprise 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 Using Statistical
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”!)
 LEAN and AGILE
approaches to manufacturing
Centre for Strategic Manufacturing

and process improvement

These slides can be downloaded from:

www.dmem.strath.ac.uk/csm/

Rebbit!

Dr Peter Ball
Centre for Strategic Manufacturing
p.d.ball@strath.ac.uk
DMEM