Tool Design

Lean
Manufacturing
Tools,
Techniques,
and
How To
Use Them
Applying Manufacturing Execution Systems
by Michael McClellan
Back to Basics:
Your Guide to Manufacturing Excellence
By Steven A. Melnyk
R.T. Chris Christensen
Enterprise Resources Planning and Beyond:
Integrating Your Entire rgani!ation
by Gary A. Langenwalter
ERP: "ools# "ec$ni%ues# and Applications
for Integrating t$e Supply &$ain
by Carol A. Ptak with li Schragenhei!
Integral 'ogistics Management:
Planning and &ontrol of &ompre$ensi(e Business Processes
by Pa"l Sch#nsleben
In(entory &lassi)cation Inno(ation:
Pa(ing t$e *ay for Electronic &ommerce and
+endor Managed In(entory
by R"ssell G. Broeckel!ann
'ean Manufacturing:
"ools# "ec$ni%ues# and ,o- "o .se "$em
by $illia! M. %el&
Macrologistics Management:
A &atalyst for rgani!ational &$ange
by Martin Stein an& %rank 'oehl
Restructuring t$e Manufacturing Process:
Applying t$e Matrix Met$od
by Gi&eon (alevi
Supply &$ain Management:
"$e Basics and Beyond
by $illia! C. Co)acino
The St. Lucie Press/APIS Series on !esource Management
"itles in t$e Series
"$e St/ 'ucie Press0API&S Series on Resource Management
Ale"andria, #irginia
St/ 'ucie Press
$oca !aton % London
&ew 'or( % )ashington, *..
+,
)ILLIAM M. -.L*
Lean
Manufacturing
Tools,
Techniques,
and
How To
Use Them
This +oo( contains information o+tained from authentic and highl, regarded sources. !e/rinted material
is quoted with /ermission, and sources are indicated. A wide 0ariet, of references are listed. !easona+le
e1orts ha0e +een made to /u+lish relia+le data and information, +ut the author and the /u+lisher cannot
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8 3447 +, )illiam M. -eld
&o claim to original U.S. 9o0ernment wor(s
International Standard $oo( &um+er 7:;<666:3=<:>
Li+rar, of ongress ard &um+er 44:4;=7?5
Printed in the United States of America 7 3 5 6 ; ? < @ = 4
Printed on acid:free /a/er
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AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
-eld, )illiam M.
Lean manufacturing B tools, techniques, and how to use them / +, )illiam M. -eld.
/. cm.
Includes +i+liogra/hical references C/. D and inde".
IS$& 7:;<666:3=<:> Cal(. /a/erD
7. Production management. 3. osts, industrial. 5. Production management E
ase studies. I. Title.
TS7;; .-6=@; 3444
?;@.;Edc37
44:4;=7?5
5
4edication
This +oo( is dedicated to m, four sons E
$enFamin, &athan, Gaco+, and Samuel.
Than( ,ou for ne0er letting me forget that I am ,our dad.
6
&ontents
Part I/ 4escription of 'ean Manufacturing
&$apter 7/ 'ean Manufacturing: A 8,olistic9 +ie-
..................................... 5
&$apter :/ 'ean Manufacturing Approac$
................................................... <
Part II/ ;i(e Primary Elements
&$apter </ rgani!ation Element
................................................................ 35
&$apter =/ Metrics Element
.......................................................................... 5;
&$apter 5/ 'ogistics Element
........................................................................ 6;
&$apter >/ Manufacturing ;lo- Element
.................................................... ?7
&$apter 6/ Process &ontrol Element
............................................................ <=
&$apter ?/ Sustaining t$e &$ange
................................................................ =7
Part III/ Putting It All "oget$er
&$apter @/ Setting t$e Stage
.......................................................................... =;
&$apter 7A/ ,o- It Begins
............................................................................ ==
&$apter 77/ "$e Game Plan
........................................................................ 747
&$apter 7:/ 'ean Assessment
..................................................................... 74;
&$apter 7</ &urrent State Gap
................................................................... 777
&$apter 7=/ ;uture State 4esign
................................................................ 77=
&$apter 75/ 4eployment
............................................................................. 757
&$apter 7>/ "$e Results
.............................................................................. 75=
?
Lean Man"*act"ring+ Tools, Techni-"es, an& (ow To .se The!
Part I+/ &ase Studies
&ase Study A: perations Redesign Program
.......................................... 765
&ase Study B: Bai!en E(ent3Based 'ean Program
................................... 7;;
&ase Study &: ,ig$3+olume3;ocused ;actory ProCect
............................ 7?;
&ase Study 4: Bai!en E(ent3Based ;ocused ;actory Pilot
..................... 7<;
&ase Study E: Assem2ly Production .nit ProCect
.................................... 7@;
&ase Study ;: ,ig$3+olume and 'o-3+olume &ell ProCect
.................... 7=;
Glossary
........................................................................................................ 34<
References
..................................................................................................... 37=
Index
.............................................................................................................. 335
@
Preface
This +oo( was written in order to gi0e the general manufacturing /ractitioner
a reference guide +, which to lead the successful design and de/lo,ment of a
lean manufacturing /rogram. It is for those indi0iduals who ha0e either tried
a lean manufacturing im/lementation and recei0ed undesira+le results or ha0e
+een wor(ing at it a while and do not reall, (now what to do ne"t. H0er the
,ears, I ha0e +ecome more and more /ragmatic in m, a//roach to lean
manufacturing.
I am not a /urist when it comes to methodolog,. In fact, in this
+oo( I am sharing with ,ou information +ased on m, own /ersonal research,
true:life e"/eriences, and lessons learned through the im/lementation of lean
/rinci/les within a num+er of com/anies. It is this +road:+ased e"/erience that
has allowed me to de0elo/ such a /ragmatic a//roach. M, e"/erience has
taught
me that, although a s/eci2c /hiloso/h, ma, wor( well with one /articular
/roFect or com/an,, it ma, not wor( as well uni0ersall, across other o/erations.
The information, time frames, and methodologies contained within this
+oo( are geared /rimaril, for o/erations that ha0e 544 to ;44 em/lo,ees.
The content was written for an audience o/erating at the le0el of /lant
manager, /roFect manager, or manufacturing manager within a +usiness,
although most certainl, schedulers, /lanners, industrial engineers, and 2rstline
su/er0isors can also +ene2t from this material. The +oo( /ro0ides tools
and techniques that can +e used for +oth high:0olume/low:mi" and low0olume/
high:mi" /roduct en0ironments. Although man, of the techniques
are designed for discrete unit manufacturing o/erations, those in the /rocess
industries could utiliIe man, of the /rinci/les /resented here, as well.
I realiIe that there are some of ,ou who o/erate within an en0ironment
that does not require ,ou to Fustif, ,our /osition on lean manufacturing
e0er, ste/ of the wa, and that such an en0ironment will acce/t the need for
7A
lean management +ased on faith. This +oo( was not written for ,ou. This
+oo( was written for ,our colleagues E those who need to Fustif, their
/osition e0er, ste/ of the wa, and must constantl, +attle Jhurdle managementK
to de/lo, their lean /rograms. 'ou (now who ,ou are and ,ou (now
what I am tal(ing a+out. This +oo( was written with ,ou in mind.
&ow, one does not learn how to +e lean Fust from reading a +oo(. It is
through actual hands:on im/lementation that one learns what does and does
not wor( in most situations. It is out on the sho/ Loor where /ractical meets
theor,. It is in the actual wor( en0ironment where one learns that to +e
successful it is more im/ortant to ha0e a clear understanding of how these
techniques wor( than a 0ague understanding of what the technique is.
This +oo( has +een di0ided into four /arts. Part I /ro0ides an e"/lanation
of
why
a holistic a//roach to lean is so +ene2cial in securing sustained
im/ro0ementM it /ro0ides an o0erall 0iew of
what
to do. The /ur/ose of Part
II is to furnish the reader with an understanding of the conce/t of the -i0e
Primar, .lementsM it e"/lores in detail se0eral as/ects of each of the 20e
elements. Part III was written in the form of a stor, to de/ict actual use of
the techniques from the ince/tion of a /roFect to im/lementation in the
factor,M it hel/s the reader see
how
and
when
these /rinci/les are a//lied as
/art of a lean manufacturing /rogram. Part I# /resents case studies of si"
di1erent com/anies that ha0e ta(en on the challenge of changing their
+usinesses
and descri+es how the com/anies ha0e de/lo,ed lean manufacturing
within their facilities. .ach case stud, was designed to re0eal a di1erent as/ect
of im/lementing lean manufacturing within an o/eration.
The entire +oo( attem/ts to /ro0ide insight as to the choice and use of
a//ro/riate tools for assessment, anal,sis, design, and de/lo,ment of a
successful
lean manufacturing /rogram. Although it does not co0er e0er, lean
manufacturing as/ect, issue, or situation, it does o1er a road ma/ that can
guide a com/an, toward the de0elo/ment of a lean manufacturing en0ironment.
H0er the ,ears, I ha0e read a+out, witnessed, and heard of a great man,
im/lementations that ha0e neither achie0ed their intended goals nor sustained
results. M, e"/erience has led me to conclude that there are se0eral
reasons for the demise of these lean manufacturing /rogramsB C7D no clari2ed
e"/ectation or 0ision as to what the new lean en0ironment was to loo( li(eM
C3D lac( of a clear direction as to where to go and what to do ne"tM C5D limited
(nowledge +ase for how to conduct the im/lementationM C6D signi2cant focus
on the mechanics of the new /rocess +ut little attention /aid to organiIation
redesign issues connected with the change. These are (e,, critical issues that
must +e addressed for an im/lementation to +e successful. The fact that man,
com/anies ha0e neglected to do so has led me to write this +oo(.
77
Ackno-ledgments
I would sincerel, li(e to e"/ress m, a//reciation to all the /eo/le and multi/le
com/anies with whom I ha0e had the o//ortunit, to wor( o0er the
,ears. I am e"tremel, grateful to a great man, of ,ou for the tremendous
(nowledge I ha0e recei0ed during the last 7; ,ears. It is the 0ast di0ersit, of
,our ideas and +usiness situations that has allowed me to ha0e the insight
necessar, to write this +oo(. .0en though hundreds of indi0iduals ha0e
inLuenced the writing of this +oo(, I would s/eci2call, li(e to than(B Phil
Parr,, of the $ourton 9rou/, for his man, hours of counsel and guidance
during a time of tremendous u/hea0al in m, lifeM !on Aarns, of $oeing, for
allowing me the o//ortunit, to show what is /ossi+le no matter what the
im/ending oddsM Gohn Paul, for gi0ing me the chance to see an entirel, new
glo+al world in a 0er, short /eriod of timeM *a0id Hall, Goe ostello, and
Mi(e $ell, for their 0alua+le insight, thoughts, and feed+ac( +oth +efore and
during the writing of this manuscri/tM Allie McArth,, for her technical su//ort,
ad0ice, and editingM and most of all I want to than( m, wife, Gulie Ann,
for sta,ing the course with me o0er the /ast 7; ,ears of learning, listening,
and leading E without her consistent su//ort, this +oo( could not ha0e +een
written.
7<
"$e Aut$or
*illiam M/ ;eld
is a client /artner with am+ridge Management onsulting
CMD, a di0ision of am+ridge Technolog, Partners. He has nearl, 7; ,ears
of industr, e"/erience im/lementing lean manufacturing im/ro0ements and
has conducted o0er ?4 indi0idual NaiIen e0ents, im/lemented o0er 344
manufacturing
cells, and managed se0eral lean manufacturing /rograms CutiliIing
man, of the conce/ts descri+ed in the +oo(D for com/anies in a 0ariet,
of industries. He has wor(ed in the machining, sheet metal, industrial /roducts,
/neumatic tools, aeros/ace, electronics, /ower dri0es, and automoti0e
industries.
Prior to his wor( with M, $ill was a manager of change management
for In0ens,s, PL, where he was res/onsi+le for the de0elo/ment and
im/lementation
of +usiness change management /rograms for In0ens,s com/anies
throughout &orth America. He has +een a /lant manager for Stanle,
Mechanic Tools and a manufacturing and materials management consultant
for .rnst O 'oung, in addition to s/ending o0er 74 ,ears in the aeros/ace
and defense industr, at $oeing Cformerl, Mc*onnell *ouglasD. $ill has also
ser0ed as /roFect manager for the im/lementation of se0eral cellular
manufacturing
/rograms and has /artici/ated in the im/lementation of two M!P
II s,stems. He has held multi/le line:management /ositions in manufacturing
and materials management. $ill recei0ed his Master of $usiness Administration
degree in o/erations management, earned a $achelorPs degree in
+usiness administration, and is certi2ed in /roduction and in0entor,
management
CPIMD with APIS. He can +e contacted at C576D 663:=<?@ or
william.feldQworldnet.att.net.
75
A2out API&S
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7>
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4ES&RIP"I1
; 'EA1
MA1.;A&".RI1G
<
7
'ean Manufacturing:
A 8,olistic9 +ie-
*$at Is Meant 2y
Holistic
E
hat is meant +, the word
holistic
R Is it meant to im/l, a wellrounded
/ers/ecti0eR Is it used to descri+e an o0erall state of
wellnessR *oes it mean all:encom/assingR If we chec( the de2nition
according to )e+sterPs .nglish *ictionar,, holistic means Jem/hasiIing
the organic or functional relation +etween /arts and wholes.K &ow, none
of these de2nitions of holistic is necessaril, wrongM howe0er, when associated
with our descri/tion of lean manufacturing, the conce/t of holistic is meant
to im/l, the interconnecti0it, and de/endence among a set of 20e (e,
elements. .ach indi0idual element is critical and necessar, for the successful
de/lo,ment of a lean manufacturing /rogram, +ut no one element can stand
alone and +e e"/ected to achie0e the /erformance le0el of all 20e elements
com+ined.
.ach of these elements contains a set of lean /rinci/les which, when
wor(ing together, all contri+ute to the de0elo/ment of a world:class
manufacturing
en0ironment, often reLected +, a com/an, in0entor,:turn le0el of
;4 or higher. As descri+ed +, Schon+erger in his +oo(,
$orl& Class Man"*act"ring+
The /e0t 1eca&e
, in0entor, turns /ro0ide com/ara+le anecdotal e0idence
of the le0el of /erformance of a com/an, regardless of changes in
economic swings, monetar, /olicies, trade /ractices, or internal com/an,
mani/ulationsB J)e need not rel, on case studies or news cli//ings. Hne
statistic e"tracta+le from cor/orate annual re/orts tells the stor, with sur/rising
accurac,B in0entor, turno0er Ccost of sales di0ided +, on:hand in0entor,D.
*
=
It ha//ens that when a com/an, manages its /rocesses /oorl,, waste in the
form of in0entor, /iles u/.K
7<
&ot onl, are these lean /rinci/les interacti0e and co:de/endent, +ut there
is also a fundamental relationshi/ that e"ists among these /rinci/les as to
the sequence +, which the, should +e de/lo,ed. So what e"actl, are these
20e elements and what ma(es them so co:de/endentR
4escription of t$e ;i(e Primary Elements
The -i0e Primar, .lements for lean manufacturing are C7D Manufacturing
-low, C3D HrganiIation, C5D Process ontrol, C6D Metrics, and C;D Logistics
C-igure 7.7D. These elements re/resent the 0arious facets required to su//ort
a solid lean manufacturing /rogram, and it is the full de/lo,ment of these
elements that will /ro/el a com/an, on a /ath toward +ecoming a worldclass
manufacturer.
-ollowing is a +asic de2nition of each of the -i0e Primar, .lementsB
A
Man"*act"ring %low+
The as/ect that addresses /h,sical changes and
design standards that are de/lo,ed as /art of the cell.
A
2rgani3ation+
The as/ect focusing on identi2cation of /eo/lePs
roles/functions, training in new wa,s of wor(ing, and communication.
A
Process Control+
The as/ect directed at monitoring, controlling, sta+iliIing,
and /ursuing wa,s to im/ro0e the /rocess.
A
Metrics+
The as/ect addressing 0isi+le, results:+ased /erformance
measuresM targeted im/ro0ementM and team rewards/recognition.
A
Logistics+
The as/ect that /ro0ides de2nition for o/erating rules and
mechanisms for /lanning and controlling the Low of material.
These /rimar, elements /ro0ide full co0erage of the range of issues that
surface during a lean manufacturing im/lementation. .ach element focuses
on a /articular area of em/hasis and com/artmentaliIes the acti0ities. .0en
though each element is im/ortant on its own for the de/lo,ment of a successful
lean manufacturing /rogram, the /ower comes from integration of
the elements. -or instance, Manufacturing -low sets the foundation for
change. Peo/le see acti0it, on the sho/ Loor, furniture +eing mo0ed Csometimes
for the 2rst timeD, machines or Loors or walls +eing /ainted, and areas
+eing cleaned u/. ."citement and energ, surround this 0isi+le change. Add
to this the less than 0isi+le changes in infrastructure relati0e to organiIational
roles and res/onsi+ilit,, new wa,s of wor(ing, training of /ersonnel, multi:
Lean Man"*act"ring+ A (olistic 'iew
5
function teaming, and identi2cation of customer/su//lier relationshi/s.
-inall,, add the 0isi+le /resence of sho/Loor measurements reLecting status,
equi/ment +eing re/aired, gra/hic wor( instructions +eing /osted at wor(
stations, and machine changeo0er times +eing recorded and im/ro0ed. These
/rimar, elements com/lement one another and are all required to su//ort
each other as /art of a successful im/lementation.
Most lean manufacturing initiati0es focus on the /rimar, elements of
Manufacturing -low, some on Process ontrol and areas of Logistics. Hnce
in a while, there is the mention of Metrics and some discussion regarding
HrganiIation, usuall, training. This lac( of attention to the whole is a shame,
+ecause it is the culture changes in HrganiIation and the infrastructure
im/ro0ements in Logistics that institutionaliIe the im/ro0ements and /ro0ide
for sustained change within the organiIation. )hen initiati0es focus on
Fust the mechanics and techniques Cindicati0e of +oth Manufacturing -low
and Process ontrolD, the im/ro0ement is more a+out calculations and formulas
than it is a+out im/ro0ing wor(force ca/a+ilit,. An,one can read a
+oo(, run a num+ers anal,sis on demand +eha0ior, calculate ta(t time, and
esta+lish a U:sha/ed la,out, +ut doing so is not what will ma(e a com/an,
di1er from its com/etition. True com/etiti0e ad0antage comes from instilling
;igure 7/7 ;i(e Primary Elements of 'ean Manufacturing
Manufacturing ;lo-
7. Product/quantit, assessment C/roduct grou/D
3. Process ma//ing
5. !outing anal,sis C/rocess, wor(, content, 0olumeD
6. Ta(t calculations
;. )or(load +alancing
?. Nan+an siIing
<. ell la,out
@. Standard wor(
=. Hne:/iece Low
Process &ontrol
7. Total /roducti0e maintenance
3. Po(a:,o(e
5. SM.*
6. 9ra/hical wor( instructions
;. #isual control
?. ontinuous im/ro0ement
<. Line sto/
@. SP
=. ;S house(ee/ing
rgani!ation
7. Product:focused, multidisci/lined
team
3. Lean manager de0elo/ment
5. Touch la+or cross:training s(ill matri"
6. Training Clean awareness, cell control,
metrics, SP, continuous im/ro0ementD
;. ommunication /lan
?. !oles and res/onsi+ilit,
'ogistics
7. -orward /lan
3. Mi":model manufacturing
5. Le0el loading
6. )or(a+le wor(
;. Nan+an /ull signal
?. A,$, /arts handling
<. Ser0ice cell agreements
@. ustomer/su//lier alignment
=. H/erational rules
Metrics
7. Hn:time deli0er,
3. Process lead:time
5. Total cost
6. Sualit, ,ield
;. In0entor, CturnsD
?. S/ace utiliIation
<. Tra0el distance
@. Producti0it,
>
ca/a+ilit, within the wor(force, and this can onl, +e accom/lished throughB
C7D achie0ing demonstrated (nowledge transfer +, +uilding an em/owered
wor(force, C3D engaging all em/lo,ees within the +usiness +, steering their
collecti0e energies in the same direction, and C5D em/owering the wor(force
with clari2ed e"/ectations, common /ur/ose, and accounta+ilit, to get the
Fo+ done. An organiIation with this ca/a+ilit, can +e neither co/ied nor
+ought +, the com/etitionM it must +e designed, de0elo/ed, directed, and
su//orted.
This +oo( focuses on the relationshi/s among each of the /rimar, elements
and /ro0ides a Jhow:toK road ma/ for im/lementing lasting change.
In order for these /rimar, elements to function /ro/erl,, the, must +e
im/lemented in the form of stages or J+uilding +loc(s.K S/eci2c foundation
/rerequisites must +e met /rior to de/lo,ment of su+sequent stages. The
initial stages contain criteria that must +e satis2ed +efore im/lementing
su+sequent stages. These criteria are li(e the /rerequisites for some college
courses. The 2rst:le0el acti0ities must +e com/leted to ser0e as +uilding
+loc(s for su+sequent stages. It is im/erati0e that these stages +e followed to
a0oid Feo/ardiIing the im/lementation and to assure success in de/lo,ing
the lean manufacturing /rogram as quic(l, as /ossi+le for ma"imum +ene2t.
Part III of this +oo( will identif, those stages and e"/lain the a//ro/riate
sequence for im/lementation.
Lean manufacturing, as descri+ed in this +oo(, is /rimaril, focused on
designing a ro+ust /roduction o/eration that is res/onsi0e, Le"i+le, /redicta+le,
and consistent. This creates a manufacturing o/eration that is focused
on continuous im/ro0ement through a self:directed wor( force and dri0en
+, out/ut:+ased measures aligned with customer /erformance criteria. It
de0elo/s a wor(force with the ca/a+ilit, to utiliIe the lean tools and techniques
necessar, to satisf, world:class e"/ectations now and into the future.
As noted +, onner in
Managing at the S)ee& o* Change+
JPeo/le can onl,
change when the, ha0e the ca/acit, to do so. A+ilit, means ha0ing the
necessar, s(ills and (nowing how to use them. )illingness is the moti0ation
to a//l, those s(ills to a /articular situation.K
5
#iewing lean manufacturing
from a holistic /ers/ecti0e should +e a+le to satisf, the need to ha0e +oth
a+ilit, and willingness.
6
:
'ean Manufacturing
Approac$
he 2rst ste/ required on this Fourne, toward creating a lean manufacturing
en0ironment is to recogniIe where we are currentl,. )e must
demonstrate an understanding as to wh, we need to change, and we
must determine wh, it is im/ortant that we ma(e a change. )hat are the
+usiness dri0ers that ha0e caused this intrusion of lean manufacturing into
our li0es and wh, should we care to /artici/ateR Answers to these questions
are required in order for /eo/le to +ecome engaged in the change /rocess.
How we handle the res/onses to these questions is critical to our success.
Moti0ation, tenacit,, leadershi/, and direction all /la, (e, roles in the successful
de/lo,ment of a lean /rogram. If we as indi0iduals are not moti0ated
to go down this /ath, if we do not ha0e a direction to guide our ne"t ste/s,
and we do not ha0e the tenacit, to sta, with the Fourne, when it +ecomes
+um/,, we ma, as well not +egin.
In order to understand the current situation, we ma, need to conduct a
self:assessment that will /ro0ide a sounding +oard or reLecti0e mirror for
our o/erating condition as it stands toda,. It will /ro0ide feed+ac( regarding
where we currentl, demonstrate ca/a+ilit,, and it will re0eal ga/s +etween
how things are +eing done toda, and what are considered to +e sound lean
/ractices. To /ro0ide some le0el of insight into this ga/, one need onl, to
loo( at the landmar( MIT stud, conducted +, )omac(, Gones, and !oos
Csee
The Machine That Change& the $orl&
D to understand how far some
o/erations are from +eing lean. -acilities that are considered lean o/erate
with far fewer resources as com/ared to those facilities that o/erate as mass
/roducersB JLean /roduction 0s. mass /roductionB 7/3 the human e1ort in
"
?
the factor,, 7/3 the manufacturing s/ace, 7/3 the in0estment tools, 7/3 the
engineering hours, 7/3 the time to de0elo/ new /roducts.K
3?
It is onl, when we are honest with oursel0es as to where we are that
/rogress can reall, +egin to ma(e signi2cant change. $enchmar(ing against
a de2ned criteria and determining our /erformance ga/ are wa,s to +egin
+uilding a stor, line for wh, we need to change Csee -igure 73.3D.
It is this stor, line that must +e communicated to the organiIation in
order to win su//ort for a change /rogram. $, the time com/an, leaders
come to the conclusion that the, need to change the com/an,, it is usuall,
after se0eral months or ,ears of seeing /ro2ts shrin( through re0enue loss at
the to/ line or mar(et share erosion. Usuall,, the, ha0e +een loo(ing at the
data and re0iewing the num+ers for quite some time. )hen the, 2nall, do
come to the ine0ita+le conclusion that change is necessar,, these same leaders
need to inform the entire organiIation as to the sco/e of what the, are
changing and wh,. Hne cannot de/lo, a maFor change such as lean
manufacturing
and e"/ect it to endure without engaging the entire wor( force. If
one does not /resent a com/elling stor, as to wh, change is necessar,,
em/lo,ees are not li(el, to +ecome engaged with the /rogram. This is not
to sa, that those initiating the change will ha0e all the answers at this initial
/hase C+ecause the, wonPtDM howe0er, the, should +e a+le to e"/lain wh, it
has +ecome necessar, to conduct +usiness in a di1erent manner.
After ha0ing gone through the self:assessment and reaching agreement
that there is a need for change, the ne"t ste/ is to assem+le a team to design,
de0elo/, and de/lo, the lean manufacturing /rogram. There are some general
guidelines to follow when selecting a team and formall, launching a /roFect.
-irst, the team must +e full timeM /art:time teams gi0e /art:time results. If
this /roFect is not serious enough to launch with full force, do not +other to
+egin. Part:time mem+ers are onl, /artiall, dedicated, which means the,
ha0e other /riorities and are not com/letel, focused on the tas( at hand. It
is +etter to dedicate three /eo/le full time than to sta1 a team with 73 /arttime
resources. Part:time teams sim/l, do not wor(.
Second, roles within the team and the wa, in which team mem+ers
interact with one another are quite im/ortant. It is im/erati0e that all mem+ers
understand their roles on the team and wh, the, were selected for the
assignment. )hen assessing /roFect team candidates, it is im/ortant to (ee/
in mind selection criteria and to ha0e an understanding of what attri+utes
are required. The following would +e a good starter list of desired attri+utesB
A
H/en minded
A
.1ecti0e communicator
Lean Man"*act"ring A))roach
@
A
!esults oriented
A
Self:con2dent
A
!esilient to change
A
hallenger of the
stat"s -"o
A
9rou/ facilitator
A
Trusted Fudgment
A
InLuential within the organiIation
In addition to each team mem+erPs e"/erience and e"/ertise, an indi0idualPs
/reference toward ta(ing on a /articular role is an im/ortant factor in
the successful outcome of a teamPs a+ilit, to deli0er a /roFect. Meredith
$el+inT
has done a signi2cant amount of research in this area and has concluded
that team role /reference can ha0e a considera+le im/act as to whether
a team will /erform successfull, or not. UtiliIation of his material can /ro0ide
some 0alua+le insight into the a//ro/riate ma(eu/ of /roFect teams.
After the team has +een selected, the, must +e mo+iliIed. To accom/lish
this, the team will need to generate two (e, documentsB a /roFect charter and
/roFect milestone /lan. The charter de2nes the /roFectPs /ur/ose, o+Fecti0es,
and outcomes. The milestone /lan identi2es maFor segments of the /roFect,
the time frame for com/letion, and a sequence of maFor e0ents. The milestone
/lan should +e +ased on a lean manufacturing road ma/ C-igure 3.7D, which
/ro0ides a common understanding for the team as to s/eci2c /hases of the
/roFect.
T Meredith $el+in is a $ritish /rofessor who has conducted nearl, 54 ,ears of research on
teams, team d,namics, and de0elo/ing insight into what ma(es successful teams wor( Csee
$el+in AssociatesP )e+siteB www.+el+in.comD.
;igure :/7 'ean Manufacturing Road Map
7A
In addition to the /roFect charter and milestone /lan, the following elements
should also +e considered as necessar, ingredients for the /ractice of
good /roFect managementB
A
ProFect /rotocol Cteam meeting time, /lace, duration, formatD
A
ProFect organiIation Csteering committee, /roFect owner, leader, etc.D
A
*e2ned roles/res/onsi+ilities Cfor organiIation structureD
A
!is( mitigation management Cidentif,ing and resol0ing /otential ris(D
A
HaIard escalation management Crules for ele0ating /ro+lemsD
A
ProFect schedule Cdeli0era+les, ownershi/, de/endenc,, resourcesD
A
Issue log Ccatalog of /roFect issues, action, dates, ownershi/D
A
ProFect +oo( Cli0ing and historical documents of the /roFectD
The team:generated charter and milestone /lans Csee -igures 77.7 and
77.3D /ro0ide the 2rst documented clari2cation of /roFect e"/ectations for
e"ecuti0e management and the /roFect team. These documents are to +e
agreed to and signed o1 on +, all /arties in order to minimiIe the ris( of
missed e"/ectations down the road. It is at this time that an announcement
should go out to the rest of the organiIation e"/laining what is a+out to ta(e
/lace in regard to the lean /rogram. This communication shouldB C7D e"/ress
the need for loo(ing at doing +usiness di1erentl,, C3D identif, who ma(es u/
the /roFect team, C5D re0eal the /roFect milestone /lan, and C6D clarif, for
em/lo,ees what this /roFect means to them.
Hnce the /roFect team has com/leted the initial de+rie2ng with management,
the, are read, to +egin detailing the lean /roFect elements, which would include
the /roFectPs deli0era+les Cthose 0er, +lac(:and:white, tangi+le /ieces of
e0idence
that /ro0ide /roof that an acti0it, is com/leteD, the de2ned wor( content
for each of the /roFect deli0era+les with assigned ownershi/ Cres/onsi+ilit,,
accounta+ilit,, and authorit,, or !AAD, the esta+lishment of resource staUng
requirements, and the teamPs agreement on /roFect management /rotocol.
Hnce the team is u/ and o/erating, it is time to get down to +usiness.
-or the team, this means wor(ing their wa, through each of the lean road
ma/ /hases. The 2rst /hase, that of Lean Assessment C-igure 3.3D, is used to
determine how the o/eration stac(s u/ area +, area and /roduct grou/ +,
/roduct grou/ from a lean manufacturing /ers/ecti0e. In this /hase, the team
tries to understand where areas of o//ortunit, and le0erage /oints e"ist
within the +usiness. The, +egin +uilding the stor, line for not onl, wh, the
+usiness needs to change +ut also where and how much. This assessment
loo(s at /rocess /erformance issues relating to the -i0e Primar, .lements +,
identif,ing waste or JmudaK o//ortunities that e"ist within the +usiness.
77
In addition to the internal search for o//ortunit,, the outline of a manufacturing
strateg, is de0elo/ed in order to assure alignment of the lean
initiati0es with the mar(et/lace and to /ro0ide insight for the a//ro/riate
design criteria that are to +e utiliIed in /hase three, -uture State *esign. As
Hunt clari2ed in
Process Ma))ing+ (ow to Reengineer 4o"r B"siness Processes
,
it is necessar, to understand the customerPs /erformance e"/ectations +efore
designing a solutionB JTo sim/lif, ,our /roduct and /rocess s,stems design,
the /rocess im/ro0ement team must 2rst understand the customerPs real
requirements and /riorities.K
77
This manufacturing strateg, outline will identif, which /roducts com/ete
in what mar(ets and wh,. It also e"/lores maFor com/etitors to understand
the com/etiti0e criteria required for certain mar(ets and determines where
the team needs to le0erage the change /rogram to gain alignment with the
current and desired customer +ase. 9unn em/hasiIed this in his +oo(,
Man"*act"ring
*or Co!)etitive A&vantage+ Beco!ing a $orl& Class Man"*act"rer
B
JIt is im/erati0e to ascertain to the e"tent /ossi+le how e1ecti0el, the
com/etitors
can manufacture /roducts.K
?
$, aligning with mar(et/lace requirements,
the /ro+a+ilit, of le0eraging +ottom:line +ene2t for the +usiness
increases tremendousl,.
After Lean Assessment is com/lete, a second de+rie2ng is conducted with
e"ecuti0e management to re/ort the 2ndings and gain a//ro0al to mo0e on
to the ne"t /hase, that of documenting the urrent State 9a/ C-igure 3.5D.
The urrent State 9a/ /ro0ides the +aseline measure of where the com/an,
is toda,. In this /hase, the teamB
;igure :/: P$ase 7: 'ean Assessment
'ean Manufacturing Implementation F(er(ie-G
'ean Manufacturing Performance Assessment
F&urrent State PerformanceG
Manufacturing Strategy
F&ompetiti(e &riteria0Market SegmentationG
Management 4e2rie)ng
7 day
:H= days
:H= days
7 day
7:
A
!ecei0es training in /rocess 0alue anal,sis CP#AD, lean manufacturing
/rinci/les, and lean anal,sis tools
A
.sta+lishes /rocess lin(ages through material and information Low
ma//ing
A
Suanti2es where o//ortunities e"ist for waste elimination
A
9enerates design criteria +ased on the mar(et/lace
A
reates a SIPH Csu//lier:in/ut:/rocess:out/ut:customerD ma/ of all
the maFor o/erational /rocesses in order to understand customer/su//lier
relationshi/s and required in/uts and out/uts that trigger these
/rocesses
A
Anal,Ies current /erformance le0els in regard to /roduction loss
function and waste elimination o//ortunities in order to /rioritiIe
im/lementation sequence and address ris(
A
*e0elo/s a Jquic( hitK list for short:term im/ro0ements and esta+lishes
a +aseline for demonstrated im/ro0ement
If this last item is gi0en a//ro0al +, e"ecuti0e management, the shortterm
im/ro0ements will +e de/lo,ed as /art of the third /hase. This would
allow the com/an, to +egin realiIing +ene2ts quic(l, and to initiate sel1unding
of the change /rogram. In addition, it allows /eo/le to see action
and results right awa,.
After in0esting 5 to ? wee(s to gain an understanding of the current state
and to con2rm that understanding with the maFor /rocess owners, a
management
de+rie2ng is conducted to inform e"ecuti0e management as to what
was disco0ered. ."ecuti0e management a//ro0al allows rite of /assage to the
third /hase, which is focused on the -uture State *esign C-igure 3.6D. In the
-uture State *esign /hase, the /roFect team /uts together an o0erall conce/t
;igure :/< P$ase :: &urrent State Gap
'ean Manufacturing and P+A "raining
&urrent State Mapping
Fmaterial0information Io- and SIP&G
Root &ause Analysis
Floss function and issue0element matrixG
<370: days
7H< -eeks
7H: -eeks
: days
7<
design of how the site should o/erate. This /rocess will ta(e a//ro"imatel,
3 to 5 wee(s and includesB
A
*etermining what /roduct grou/ings e"ist and how the, would +e
/roduced
A
9enerating a general organiIation structure
A
Producing a +loc( la,out for the /lant
A
Anal,Iing /roduct demand +eha0iors and material/information Low
A
Pro0iding team training for the o0erall o/erations management structure
C/ossi+l, including site 0isits to other lean o/erationsD and e"/osure
to di1erent manufacturing architectures
A
on2rming the conce/t design with maFor /rocess owners
A
*e0elo/ing a new demand management /rocess for logistics Corder
launch to /roduct deli0er,D
The teamPs conce/t design is /resented to e"ecuti0e management for
re0iew and a//ro0al. )hen +lessed, the team focuses the ne"t 5 to 6 wee(s
on the second half of /hase three, the de0elo/ment of a detail design. The
outcomes of this detail design includeB
A
Sho/Loor staUng /lans
A
ell wor(load anal,sis
A
Transition strateg,
A
Im/lementation /lan
A
*e2ned e"it criteria
;igure :/= P$ase <: ;uture State 4esign
perations Management "raining FManufacturing ModelsG
&oncept 4esign
Plant &ommunication
70: day
7H: -eeks
7 day
:H< -eeks
7 day
: days
4etail 4esign
Fimplementation plan and transition strategyG
7=
A
Sho/Loor organiIation roles and res/onsi+ilities
A
on2rmation of the detail design with maFor /rocess owners
A
Sho/Loor training /rogram
A
ommunication /rogram
This /ac(age is /resented to e"ecuti0e management for a//ro0al. U/on
agreement as to the lean /rogram rollout, a communication regarding the
im/lementation /lan should go to all em/lo,ees e"/laining what was disco0ered,
who was in0ol0ed, what was decided, where the organiIation is going,
and where all em/lo,ees 2t in. It is at this time that the /roFect team mo0es
into the fourth /hase, Im/lementation.
&ow that the team has s/ent the last = to 7; wee(s on assessment, anal,sis,
design, and /lanning, it is time for the real action to +egin. The in0estment
in time and resources s/ent u/ front to understand the current /rocess and
design the future state can now quic(l, /a,o1. It is through the de2nition
of a design criteria, the descri/tion of mar(et/lace and customer 0alue
o//ortunities,
and the esta+lishment of im/ro0ement initiati0es around /roduct
grou/ings that alignment of the lean manufacturing /rogram will le0erage
ra/id +ene2ts during de/lo,ment. This logic is similar to that descri+ed +,
)omac( and Gones in
Lean Thinking+ Banish $aste an& Create $ealth in 4o"r
2rgani3ation
B JA 2rm might ado/t the goals of con0erting the entire organiIation
to continuous Low with all internal order management +, means of
a /ull s,stem. The /roFects required to do this might consist ofB C7D reorganiIing
around /roduct families, with /roduct teams ta(ing on man, of the
Fo+s of the traditional functionsM C3D creating a Vlean functionP to assem+le
the e"/ertise to assist the /roduct teams in the con0ersionM and C5D commencing
a s,stemic set of im/ro0ement acti0ities to con0ert +atches and
rewor( into continuous Low.K
3;
The im/lementation of manufacturing cells is now conducted though a
series of stages 0ia JNaiIen e0ents.K These stages ser0e as +uilding +loc(s and
set the foundation for su+sequent stages C-igures 3.; and 3.?D. -or e"am/le,
im/lementation of the 2rst stage includesB
A
.sta+lishing the +aseline cell design
A
$alancing the cell to ta(t time
A
*ocumenting the standard wor( content
A
.sta+lishing 0isual controls
A
reating the o/erating rules
A
Introducing intra:cell material /ull
A
*e2ning team roles and res/onsi+ilities
75
;igure :/5 Implementation Met$odology
;igure :/> 'ean Manufacturing Principles
7>
)hen the one:wee( NaiIen e0ent is o0er, the second wee( is s/ent twea(ing
the /rocess and allowing for adFustments. This is due to the fact that not
e0er,thing can +e im/lemented in its 2nal form during the 2rst wee(. After
a+out ? wee(s of o/eration, the /rocess should +e sta+iliIed and /erforming
at targeted /erformance le0els. At this /oint, a lean manufacturing audit Csee
-igure 73.6D should +e conducted to ma(e sure the im/lementation is e"hi+iting
lean manufacturing characteristics and has demonstrated a signi2cant
change in /erformance C-igure 3.<D.
Hnce the cell is /erforming at the desired le0el and has /assed the audit,
the cell team is allowed to /ursue the second stage, which is de/lo,ed in the
same manner as stage oneM howe0er, this stage focuses onB
A
!a/id utiliIation of single:minute e"change of dies CSM.*D
A
.sta+lishment of a formal total /roducti0e maintenance CTPMD /rogram
A
Incor/oration of Po(a:,o(e de0ices
A
UtiliIation of statistical /rocess control CSPD
A
Team mem+er cross:training
A
UtiliIation of continuous im/ro0ement tools
A
*e/lo,ment of inter:cell /ull s,stem
Again, there is a ?: to <:wee( /eriod for sta+iliIation to ensure that desired
/erformance le0els are +eing achie0ed and to conduct a formal audit. Hnce
the second stage is com/leted, the cell team quali2es for ad0ancement to the
;igure :/6 Expected Bene)ts
76
third and 2nal stage, which is reall, where world:class /erformance ca/a+ilities
are achie0ed through the cellPs ca/a+ilit, toB
A
Perform mi":model manufacturing
A
*eli0er ma(e:to:order /roduction
A
on0ert to a one:le0el +ill of materials C$HMD
A
Ta(e ad0antage of 2nished:goods 0ariation techniques
A
Su//ort Le":fence demand management
A
UtiliIe material +ac(Lushing
A
onduct a failure mode and e1ects anal,sis C-M.AD
A
alculate /rocess ca/a+ilit, C/ND
A
ontri+ute to the assessment of /roducts through design for manufacturing/
assem+l, C*-MAD /rinci/les
-or /ur/oses of ris( mitigation, the 2rst cell needs to +e de/lo,ed as a
/ilot cell, where o0er ;4W of all lessons learned are o+tained. a/turing those
lessons learned and utiliIing them during the de/lo,ment of su+sequent
/roduction cells is in0alua+le. As each cell is im/lemented and +ecomes
selfsustaining,
loo( to lin( indi0idual /roduction cells together through customer/
su//lier alignment with inter:cell Nan+ans. It is im/ortant to ma(e
sure that indi0idual cells are sta+le +efore interconnecting them with other
cells. If the, are not, the internal su//l, chain is /ut at ris(.
Hnce ;4W of the /roduction cells are in stage two and well on their wa,
toward self:sustaining im/lementation, it is time to ta(e the focus of the
/roFect team o1 the sho/ Loor and to +egin to /ursue im/ro0ements in other
areas of the +usiness. This is in (ee/ing with the ad0ice gi0en +, Imai in
Ge!ba 5ai3en
B J9em+a NaiIen +ecomes the starting /oint for highlighting
inadequacies in other su//orting de/artments and identi2es s,stems and
/rocedures that need to +e im/ro0ed.K
73
The 2rst area to address, therefore,
would +e that of customer interface for order /rocessing and demand
management.
$, this time in the /roFect, enough im/ro0ement has +een demonstrated
on the sho/ Loor that it is time for the team to wor( its wa, down
the 0alue stream toward the customer +ase.
The second area of focus would +e that of /roduct de0elo/ment. &ow
that the sho/ Loor has a greater understanding of its ca/a+ilit,, the, can
deli0er e"tremel, 0alua+le insight into /roduct designs and also contri+ute
to the new /roduct de0elo/ment /rocess. The third area of focus would +e
redesign of the organiIation from where it is now to something that is more
reLecti0e of the new manufacturing architecture, where form would +egin
to follow function. The fourth area would +e that of the e"ternal su//l, +ase.
7?
&ow that a solid wor(ing model e"ists inside the factor, and con2dence has
+een gained in using the lean tools and techniques, it would +e a//ro/riate
for the /roFect team to wor( u/ the 0alue stream toward the su//lier +ase.
.0en though these initiati0es are listed in a serial manner, the, can +e
addressed in /arallelM howe0er, that is onl, recommended with a word of
caution. A com/an, has onl, so man, resources and realisticall, cannot
address more than three to 20e com/an,:wide initiati0es at an, one time. In
addition, if lean manufacturing cannot +e demonstrated at ,our own facilit,,
it would not +e wise to e"/ect a customer or su//lier to Fum/ on +oard
unless the, ha0e alread, +een conducting lean manufacturing initiati0es
within their facilities. Some acti0ities can +e done in /arallel, +ut +e aware
of ca/a+ilit, surrounding the entire su//l, chain. !emem+er that a chain is
onl, as strong as its wea(est lin(.
Ingersoll .ngineers, in
Making Man"*act"ring Cells $ork,
/ro+a+l, +est
summariIed this o0erall a//roach to lean manufacturingB JThe greatest +ene2ts
are realiIed quic(l, in com/anies that include all a1ected functions from
the +eginning of the Le"i+le manufacturing cell C-MD /roFect. Xells sim/l,
donPt wor( well, if at all, when the, are not /art of an o0erall strateg, of
change underta(en +, their users. ells standing alone are worthless. The,
are isolated islands remote from the rest of the world.K
75
-or an, /roFect team
to +e successful, a num+er of /roFect management assum/tions are required
C-igure 3.@D.
The one 2nal question that remains for management to address to ensure
a successful conclusion to the lean manufacturing /rogram is JAre ,ou willing
to do what it ta(es to +ecome a world:class manufacturing organiIationRK
C-igure 3.=D. If management is not willing to commit to these issues, then it
is not recommend that the, /ursue de/lo,ment of a lean manufacturing
/rogram. If these (e, ingredients are not /resent within the s/irit of the
o/eration, the im/ro0ement initiati0e will struggle se0erel, and often time
result in failure.
;igure :/? ProCect Management Assumptions
J "$e proCect -ill 2e gi(en t$e time necessary to deploy/
J "$e proCect -ill 2e gi(en resources Ffunds and peopleG/
J "$e proCect -ill 2e gi(en a full3time0focused team/
J "$e proCect -ill 2e gi(en clear expectations/
J "$e proCect -ill $a(e an identi)ed management sponsor/
J "$e proCect -ill $a(e access to management guidance/
7@
Part I of this +oo( has /ro0ided insight into the o0erall as/ects of a holistic
lean manufacturing /rogram and has demonstrated how to set u/ and manage
a lean /rogram. Part II will descri+e in greater detail each as/ect of the
-i0e Primar, .lements of lean manufacturing.
;igure :/@ 8Are You *illing "oKE9
J &an you impact production for 7 -eekE : -eeksE < -eeksE
J &an you dedicate < to ? people for > to @ mont$sE
J &an you endure failure and mistakes 2efore success
and impro(ed performance are fully reali!edE
J &an you pro(ide commitment# e(en -$en you do not see maCor
results after : mont$sE
J &an you $old t$e course for 7? to := mont$sE
II
;I+E PRIMARY
E'EME1"S
:<
<
rgani!ation
Element
ost /roFect managers recogniIe that culture is one of the toughest
things to change in an, com/an,. $, de2nition, a com/an,Ps culture
is Jthose acti0ities that go on within a com/an, when management
is a+sent.K A com/an,Ps culture contri+utes signi2cantl, in the
formation of an organiIationPs +eha0ior and can +e diUcult to alter. $eha0iors
that relate s/eci2call, to a com/an,Ps informal o/erating s,stem ha0e
usuall, +een culti0ated o0er man, ,ears and ma, not su//ort or align with
new continuous im/ro0ement initiati0es. A lean manufacturing im/lementation
cannot sur0i0e within an old culture that does not su//ort a new
o/erating en0ironment.
Man, questions are as(ed +, management and em/lo,ees ali(e when facing
a lean manufacturing im/lementation with its newl, de0elo/ed res/onsi+ilities.
)ho has ownershi/ for /roductsR )hat ha//ens when a /roduct lea0es
the cellR Is our touch la+or wor(force cross:trained suUcientl, to o/erate in
a lean en0ironmentR )hat does a cell mean to our com/an,R *o we in0ol0e
the unionR *o we alread, ha0e cell leaders, or should the, +e inter0iewed and
selectedR )ho re/orts to the cell leaderR )hat is the role of a cell leaderR Is it
Fust touch la+orR Is it /roduction controlR Is it /roduction engineersR Is it
qualit, ins/ectionR
All of the a+o0e are e"cellent questions and are usuall, o0erloo(ed when
a lean manufacturing im/lementation is limited to equi/ment rearrangement
and sho/Loor la,outs. There are o0er a doIen di1erent cultural issues in0ol0ed
with these questions, and an, one of them can sto/ an im/lementation dead
in its trac(s. Most factories toda, still require human resourcesM therefore,
M
:=
/eo/le /la, an instrumental role in the success or failure of factor, im/ro0ement
initiati0es. Man, initiati0es ha0e failed due to the neglect of these cultural
issues. So how does one handle this inLu" of cultural:related questionsR )hat
methods are utiliIed to tac(le these issuesR To address these questions in a
logical manner, indi0idual areas ha0e +een identi2ed for discussion hereB
7. ommunication Planning
3. Product:-ocused !es/onsi+ilit,
5. Leadershi/ *e0elo/ment
6. H/erational !oles and !es/onsi+ilities
;. )or(force Pre/aration
&ommunication Planning
J)hatPs in it for me and where do I 2t inRK If ,ou want to get /eo/lePs attention,
nothing /iques their interest more than threatening their Fo+s or changing the
wa, in which the, do their wor(. *o not (ee/ them in the dar( a+out the
/ro/osed changes. -ear is the human emotion that (ee/s us alert during times
of duress and (ee/s us ali0e in situations of great danger. -ear is a moti0ator.
)hen indi0iduals are threatened +, actions that ha0e the /otential to im/act
their li0elihood, the, /rotect and tr, to /reser0e those things o0er which the,
ha0e control and fend o1 those o0er which the, do not. Thus, it is +est not
to generate fear of an initiati0e +efore it e0en gets o1 the ground. *e0elo/ a
communication /lan that is focused at three le0els within the organiIation,
and tailor the content and su+Fect matter to each C-igure 5.7D. UtiliIe 0arious
forms of media to distri+ute the message and /ro0ide a clear understanding
;igure </7 &ommunication Planning ,ierarc$y
Executi(e 'e(el: Education
FBrie)ng# ProCect Re(ie-s# Site +isits#
4emonstrations# Seminars# etc/G
Middle Mgt/ 4e(elopment: "raining
FPresentations# Status Reports# Skills "raining#
;ace3to3;ace Interactions# etc/G
.pdate t$e Masses: Information
F1e-sletter# "o-n ,all# &ommunication Boards#
Meeting 1otes# &ulture "esting0;eed2ack# etc/G
2rgani3ation le!ent
:5
a+out what is required for each audience. ."ecuti0e management requires
understanding and the a+ilit, to a//ro0e. Middle management needs a
signi2cant
amount of education and training. The masses require 0alidation and
assurances that the, are included in the /roFectPs de/lo,ment.
)hen /resenting the /lan to the di1erent le0els within the organiIation,
ma(e sure the following four questions are answered as a /art of the
communications
C-igure 5.3DB
7. )h, are we changingR
3. )hat are we changingR
5. )here are we nowR
6. )hatPs in it for meR
h! Are e Changing"
Put together a /resentation that is a//lica+le to all em/lo,ees in the
organiIation.
It should +e a relati0el, high:le0el +rie2ng thatB
7. *escri+es wh, the +usiness is ma(ing a change in this direction C+usiness
en0ironment, com/etiti0e /osition, mar(et o//ortunit,, etc.D
;igure </: Aspects of &ommunication Planning
:>
3. ."/lains how 0arious em/lo,ees will 2t into the new en0ironment Cwho
could +e a1ected, le0els of management, /otential role changes, etc.D
5. lari2es o/erational e"/ectations Ce.g., 5;W im/ro0ement in o/erational
/erformance, 33W increase in mar(et share, 7@W reduction in
total costsD
hat Are e Changing"
Show an o0erall /roFect /lan that addresses such issues as +udget Cwhere the
mone, is coming fromD, im/lementation schedules, maFor milestones, and
areas in0ol0ed in the de/lo,ment.
here Are e #o$"
*escri+e the stage of the game at which the /roFect is currentl, residing.
Pu+lish a regular newsletter or e:mail for the sho/ Loor and oUce en0ironment
to (ee/ /eo/le u/ to date with how the im/lementation is /rogressing.
hat%s In It for Me"
Address the following issues from the /ers/ecti0e of the indi0idual em/lo,eeB
7. )here do I 2t into the new organiIationR
3. How will this change a1ect the wa, I /erform m, Fo+R
5. How do I +ene2t or 0alue from this changeR
Addressing these four questions will +egin to engage /eo/le with the change
/rocess and hel/ secure their in0ol0ement o0er the long haul.
Product3;ocused Responsi2ility
Thin( a+out ,our own organiIation for a minute and as( ,ourself this questionB
If a customer called toda, and as(ed who in ,our organiIation was
res/onsi+le for the qualit, and deli0er, of /roduct >>:7536, what would ,our
answer +eR If there is a deli0er, /ro+lem, do we turn to /roduction controlR
If there is a qualit, /ro+lem, do we turn to ins/ectionR If there is a /roduct
cost issue, do we inquire with accountingR Using such logic to sol0e these
2rgani3ation le!ent
:6
/ro+lems can +e attri+uted to the e0er:/o/ular Jfunctional organiIation.K
.0er,one has a /iece of the action +ut no one has res/onsi+ilit, for the
whole, e"ce/t /erha/s at the /lant manager le0el. As( ,ourself, is the /lant
manager the a//ro/riate /erson to +e addressing s/eci2c questions a+out
/roductsR ShouldnPt the /eo/le with assigned res/onsi+ilit, for the /roduct
+e answering questions a+out the /roductR The answer is ,es. 'es, the,
shouldY
According to Schon+erger in
$orl& Class Man"*act"ring+ The Lessons o*
Si!)licity A))lie&
, this /oint is e"tremel, im/ortant for reducing in2ghting
and waste in the /rocessB J)orld lass Manufacturing C)MD requires organiIing
for quic( Low and tight /rocess:to:/rocess and /erson:to:/erson
lin(ages. The o0erriding goal is to create res/onsi+ilit, centers where none
e"isted +efore. )hen res/onsi+ilit, centers are o/erating, the /rocrastinating,
2nger:/ointing, and ali+iing fadeM the stage is set for con0ersion to a culture
of continuous im/ro0ement.K
7?
How, then, does one +ring a+out this realignment
of ownershi/R
This realignment can +e achie0ed +, addressing three as/ects of lean
manufacturingB
7. *e0elo/ing a res/onsi0e material and information Low infrastructure
CLogisticsM see ha/ter ;D
3. *esigning a Le"i+le manufacturing architecture CManufacturing
-lowM see ha/ter ?D
5. Transitioning ownershi/ through the conce/t of em/owerment
All of these as/ects were referred to +, Mahone, in
(igh6Mi0 Low6'ol"!e
Man"*act"ring
B J.m/lo,ee /artici/ation and em/owerment are results of the
/roduction situation. Attem/ts to em/ower the wor(force and o+tain continuous
qualit, im/ro0ement without a sound underl,ing s,stem of su//ort
are doomed to failure.K
76
The o0erriding /remise here is that the res/onsi+ilit,
for decisions and accounta+ilit, for /erformance are delegated to em/lo,ees
in a gi0en cell when the, ha0e the a//ro/riate le0el of training, tools, and
techniques +, which to em+race this new ownershi/.
A critical change required to su//ort this realignment of ownershi/ is to
ma(e it clear that cells are formed around /roducts and /roducts are the
res/onsi+ilit, of cell mem+ers under the direction of a cell leader. The cell
team has res/onsi+ilit,, accounta+ilit,, and authorit, C!AAD for /roduct
qualit,, deli0er,, cost, and an, other element or as/ect of that /roduct that
is assigned to the cell le0el. .ach cell should +e /ro0ided with the resources
:?
necessar, to carr, out this mission. That does not mean that e0er,
organiIationPs
cells will loo( or +e sta1ed in e"actl, the same manner, +ut it does
mean that each com/an, will assign the a//ro/riate cell resources to match
their gi0en !AA.
An organiIationPs siIe, le0el of manufacturing /rocess com/le"it,, le0el
of cultural maturit, in terms of em/owerment, etc. are all factors in determining
the ma(eu/ of cell organiIation structures. At a minimum, the cell
should +e sta1ed with a dedicated cell leader Cwho could manage more than
one cellD, identi2ed touch la+or /ersonnel, and an, required su//ort
resources Ce.g., /roduction control, /roduction engineers, qualit, /ersonnel,
maintenanceD necessar, to carr, out the mission of the cell team. It ma, +e
2scall, /rudent to dedicate su//ort /ersonnel to more than one cellM howe0er,
each organiIation will ha0e to determine a +est 2t for their own o/eration.
Some organiIations ha0e esta+lished a two:tier structure in which the da,to:
da, acti0ities Cthose occurring within 7 to 54 da,sD are handled at the
sho/Loor le0el and the month:to:month acti0ities Cthose within ?4 to =4
da,sD are managed at a le0el a+o0e the sho/ Loor. This di0ision of la+or
allows for the se/aration of resources for /lanning and e"ecution. !esources
a+o0e the sho/ Loor can concentrate on /re/lanning and /ro+lem /re0ention
without +eing consumed with 2re2ghting ta(ing /lace on the sho/ Loor. The
dedicated sho/Loor resources can focus their energies on the /roduct and
e"ecuting da,:to:da, requirements.
In order for indi0iduals and teams to +e successful in an em/owered
en0ironment, a few ingredients are required C-igure 5.5D. If /eo/le are gi0en
clear e"/ectations, the /ro/er en0ironment in which to concentrate, minimal
interru/tions, immediate and direct feed+ac(, challenging goals, and the
s(ills necessar, to /erform their Fo+s, /ositi0e /erformance results will +e
generated. )hen management creates this en0ironment and nurtures these
conditions, em/owered, self:directed teams can Lourish.
;igure </< "o Be Successful# People *antK
J A clear o2Cecti(e
J 1eed for intense concentration
J 'ack of interruptions
J &lear and immediate feed2ack
J Sense of c$allenge
J Skills ade%uate to perform t$e Co2
2rgani3ation le!ent
:@
'eaders$ip 4e(elopment
As( ,ourself, JAre the sho/ foremen I ha0e running m, sho/ Loor toda, the
leaders I want o/erating cells within m, lean manufacturing en0ironment of
the futureRK This is a 0er, diUcult question for man, /lant managers to
answer +ecause the, ha0e to determine whether the Jdown in the trenchesK
frontline su/er0isors who ha0e gotten the organiIation where it is toda, are
quali2ed to ta(e it to the ne"t higher le0el of /erformance for tomorrow.
)hen an im/lementation considers onl, the /h,sical as/ects of a lean
manufacturing
/roFect, this idea of /ro/er leadershi/ is ne0er addressed. In order
for a wor(force to +e trul, em/owered, it must 2rst +e equi//ed with the
a//ro/riate management s(ills and (nowledge that will ena+le it to set its
direction, maintain control o0er its destin,, and sustain continuous im/ro0ement
after the initial im/lementation team is long gone. This does not
ha//en +, Jteaching an old dog new tric(s.K This is not to sa, that sho/
foremen are not ca/a+le of leading and managing cellsM howe0er, a com/an,
that is transforming to a lean en0ironment is esta+lishing new mini:+usinesses,
not new factor, de/artments. )e are not Jrearranging the dec( chairsK
in this new en0ironment. )e are loo(ing for leaders who can /lan acti0ities,
set o+Fecti0es, manage more than Fust tas(:+ased wor( assignments, and
recogniIe cause:and:e1ect relationshi/s relati0e to /roduct cost. These are
not /ositions to +e 2lled +, indi0iduals who ha0e +een /romoted u/ the
ran(s +ecause of e"cellent sho/ (nowledge. These are +usiness managers who
could 0er, li(el, +e required to interface with outside customers and su//liers.
As stated +, To+in in
Re6&"cating the Cor)oration+ %o"n&ations *or the
Learning 2rgani3ation
B JHrganiIations are +ecoming Latter, with fewer le0els
se/arating the to/ oUcers of the com/an, from the lowest le0els. X)or(
teams, whether within a single function or cross:functional, are +ecoming
(e, organiIational units. The, are +eing gi0en more and more res/onsi+ilities
that used to +elong to higher le0el managers E from /ro+lem sol0ing to
hiring to ma(ing ca/ital in0estments.K
36
#iewing the situation in this light,
who do ,ou want ,our ne"t cell/+usiness unit leaders to +eR
How do ,ou 2nd these future leadersR Man, of them currentl, wor( in
the factor, or at least within the com/an, toda,. onsider, the ne"t time ,ou
are in a meeting that includes em/lo,ees from 0arious functions across the
+usiness, who is e"hi+iting the following characteristics or management
s(illsB /lanning, leadershi/, /ro+lem:sol0ing a+ilit,, team +uilding, technical
com/etenc,, and inter/ersonal communication. These are the /eo/le ,ou are
loo(ing for to 2ll leader roles. These are the /eo/le who will challenge the
stat"s -"o
. These are the /eo/le who will wor( with their direct re/orts to
<A
accom/lish a set of gi0en o+Fecti0es. Howe0er, if ,ou cannot readil, see and
identif, such /ersonnel, do not des/airM there is still ho/e.
$, de0elo/ing and de/lo,ing a formal selection and assessment /rocess,
a com/an, can utiliIe a structured framewor( +, which to select future cell
leaders C-igure 5.6D. It is highl, recommended that some form of a formal
/rocess +e used in the selection of cell leaders for three reasonsB C7D the human
resources de/artment should +e a+le to (ee/ ,ou out of hot water on the
numerous legal issues surrounding em/lo,ee discriminationM C3D ,ou and the
new cell leaders will +e a+le to identif, a training /lan for those s(ills that
are required for the /osition ,et are lac(ing at the time of selectionM and,
most im/ortantl,, C5D ,our new leaders will +e selected out of a 2eld of their
/eers. The, ha0e +een singled out as the J+estK to 2ll this new /osition and
will now directl, +e hel/ing the com/an, succeed with this new direction.
)hat could +e more rewarding for a self:moti0ated indi0idual who has the
desire to lead than to ha0e his leadershi/ qualities recogniIed through a
formal assessment /rocess and to +e selected to manage a cellR )hen this
highl, moti0ated /erson, with leadershi/ and team:+uilding s(ills, is em/owered
to organiIe his team and set a course for continuous im/ro0ement, there
will +e no limit to what this team can accom/lish.
perational Roles and Responsi2ilities
&ow that we ha0e a cell leader and ha0e assigned team mem+ers, we should
+e read, to mo0e on to the ne"t cell, rightR )rongY *o ,ou thin( that within
;igure </= &ell 'eader Selection Steps
&ommunicate
t$e need and
expectations for
cell leader candidates
Pro(ide information
a2out t$e
ne- position
,a(e candidates
pro(ide a selfassessment
and skills analysis
Identify skill gaps#
select cell leaders#
de(elop training plan
&onduct formal
group inter(ie-s
of candidates
Assess candidate
responses and
select for inter(ie-
2rgani3ation le!ent
<7
this new wor(ing en0ironment the traditional functional roles will remain
unchanged and una1ectedR The roles and res/onsi+ilities of +oth touch la+or
and su//ort /ersonnel will +e altered. Some /ositions will +e changed more
than othersM nonetheless, the, all will +e di1erent. The cell teams should +e
sta1ed with the minimum, Le"i+le resources necessar, for them to meet all
o/erational /erformance o+Fecti0es. This will almost certainl, 0ar, from cell
to cell and com/an, to com/an,, +ut the fact remains that we are all doing
more with less in this increasingl, com/etiti0e glo+al world of manufacturing.
In light of this, the num+er one com/etiti0e wea/on that comes to mind
is Le"i+ilit,M therefore, /lan on staUng the cell with at least the minimum it
needs to sur0i0e and allow continuous im/ro0ement to +ecome a moti0ator.
If the cell is de0elo/ed with an o0ersta1ed design, then when im/ro0ements
are generated /eo/le will immediatel, need to +e remo0ed from the cell to
address /roducti0it, o+Fecti0es.
)hen o/erating within a union en0ironment, +e sure to include local
union management /artici/ation during these design e1orts. There will +e
issues that arise when o/erating in a union en0ironment that do not arise
in a non:union en0ironment. The (e, to im/lementing lean manufacturing
in a union en0ironment is o/en and direct communication. How well the
need for change and de2ning JwhatPs in it for meK are communicated to the
organiIation at the launch of the /roFect can go a long wa, toward reducing
conLict at this Functure. &umerous issues will arise when dealing with contract
la+or, such as Le"i+ilit, across la+or classi2cations, a limit to Jindi0idual
Fo+K contract language, method of /a,, ,ears of seniorit,, +um/ing rights,
o0ertime allocation rules, etc. It is not that lean manufacturing cannot +e
im/lemented in a union o/eration Csee case studiesDM it Fust requires additional
considerations. onLict resolution through Foint /ro+lem:sol0ing is
critical to o0ercoming union and com/an, management issues. Limiting
disagreements to the facts and not o/inions, agreeing on the direction to +e
ta(en and /erformance le0els the com/an, needs to achie0e to sur0i0e and
grow, and Foint /ro+lem:sol0ing to achie0e those +usiness results can
signi2cantl,
inLuence how far a lean manufacturing im/lementation will go
and how quic(l,.
The 2rst ste/ in determining the roles and res/onsi+ilities of a cell team
is to esta+lish an agreed:u/on focus Ci.e., mission or charterD for the entire
team on which the, will concur and can channel their collecti0e energies.
This will allow the team to determine the functions required to ma(e the cell
wor(. The second ste/ is to assign which functions the cell team mem+ers
should and should not do. This is achie0ed +, ma//ing out the o/eration,
assigning res/onsi+ilities, and identif,ing the ga/s. The third ste/ is the
<:
de0elo/ment of an o/erational descri/tion or functional s/eci2cation that
de2nes the required tas(s and res/onsi+ilities.
Hnce the functions required to o/erate the cell ha0e +een agreed u/on,
team mem+ers for each indi0idual Fo+ function can write s/eci2c roles. This
will not onl, hel/ to eliminate the gra, areas of functional res/onsi+ilit,, +ut
it will also clarif, for the human resources de/artment what the new Fo+
descri/tions are so the, can utiliIe this documentation to sort out di1erent
/a, grades and title changes. In addition, +, in0ol0ing union re/resentation
u/ front during the de0elo/ment of roles, the, are cogniIant of the changes
and can highlight union contract issues earl, in the /rocess. The, retain
ownershi/ for the 2nal /roduct and can more easil, mitigate concerns that
ma, arise with the local union management.
*orkforce Preparation
Although we introduced Le"i+ilit, earl, in our discussion of o/erational roles
and res/onsi+ilit,, this is where its im/act can +e felt on a minute:+,:minute,
hour:+,:hour +asis. Increasing the s/eed of wor(Low through the cell is one
of the /rimar, o+Fecti0es for lean manufacturingM therefore, those indi0iduals
who actuall, touch the /roduct Csha/e it, mold it, machine it, assem+le it,
etc.D are trul, the onl, 0alue:adding acti0it, from the customerPs /ers/ecti0e
and need to +e e1ecti0el, de/lo,ed when /roducing the /roduct. This means
each touch la+or em/lo,ee ultimatel, will need to +e ca/a+le of o/erating
e0er, /rocess within the cell. This is more easil, said than done, +ut the
transformation has to +egin somewhere. A recommended a//roach to initiating
this transformation is to +uild a s(ills matri" C-igure 5.;D, in which
the /eo/le in the cell are listed on the
y
:a"is and the /rocesses or o/erations
to +e /erformed are listed across the to/ on the
0
:a"is.
-illing out this matri" gi0es the cell team and cell leaders the means to
identif, areas and /eo/le requiring training. A recommended a//roach to
soliciting in/ut C+ecause this can +e a 0er, uncomforta+le /art of the cell
de0elo/ment /rocessD is for the cell leader to as( his touch la+or /ersonnelB
C7D what the, can do well, and C3D what the, cannot do +ecause of an,
limitations Ce.g., union contract, /h,sical conditionsD. *o not as( them what
the, cannot do. This is a negati0e a//roach and /uts the em/lo,ee on the
defensi0e. It will +ecome e0ident soon enough as to what the, cannot do
when the, ha0e to +egin /erforming at multi/le wor(stations. $, incor/orating
a 0alidation /rocess to clarif, what is e"/ected of the Fo+, and 0alidating
/erformance in regard to those clari2ed e"/ectations, the cell leader will +e
2rgani3ation le!ent
<<
a+le to de0elo/ a more accurate /icture of the ca/a+ilit, of the cell. om/anies
should de0elo/ a fair and un+iased 0alidation /rocess. In doing so, the,
ma, +e a+le to ta(e ad0antage of a s(ill:+ased /a, scenario down the road.
In addition to an inquir, as to what the, can do well, as( the em/lo,ee to
ran( their s(ills from strongest to wea(est. This will hel/ esta+lish training
/lan /riorities. After the matri" is com/lete, ,ou should ha0e a /rett, good
idea a+out what areas for im/ro0ement need to +e addressed in the short
term.
As cell team mem+ers +ecome familiar with their new res/onsi+ilities,
accounta+ilit, for /erformance can +egin to +e esta+lished. #alidation of
actual /erformance and the use of control mechanisms that loo( at 0ariation
from /lan +oth su//ort adherence to standards and dri0e continuous
im/ro0ement in the /rocess. It is through this monitoring of the /rocess,
that we can (ee/ our o/erational out/ut /erformance in chec(, as we will
see in the ne"t cha/ter.
;igure </5 &ross3"raining Matrix
<5
=
Metrics Element
n com/arison with the other four elements CHrganiIation, Logistics,
Manufacturing -low, and Process ontrolD, Metrics CmeasurementD is
the element that /ro0ides the /rimar, focus for changing +eha0ior. It is
this element that ensures alignment +etween cell:le0el sho/Loor acti0it, and
higher le0el com/an, +usiness o+Fecti0es. It is this connection that is necessar,
for lean manufacturing im/ro0ements to a//ear on the +ottom line.
This cha/ter will descri+e how em/owerment at the cell le0el to achie0e
o/erational o+Fecti0es leads to im/ro0ed /erformance, resulting in an im/act
on the com/an,Ps +ottom line. The metrics descri+ed will not +e new, +ut
the, ma, +e a//lied and managed in a manner that could +e contrar, to
what some com/anies are accustomed.
&o matter what com/an, or what industr,, we all ha0e our fair share of
metrics. There are metrics on c,cle time, defects /er unit, items shi//ed on
schedule, direct la+or cost, return on net assets C!H&AD, o0ertime, /ercentage
of wor( orders released on time, cost of qualit,, hours of rewor(, cash Low,
in0entor, turno0er, etc. &o com/an, is lac(ing for re/orted measurements of
/erformance. It is recogniIed that com/anies are s/ending 0alua+le resources
collecting, sorting, anal,Iing, and dis/la,ing these /erformance data and
re/orting them on a monthl,, wee(l,, dail,, and sometimes e0en hourl, +asis.
If we, as com/anies, are s/ending this much e1ort on measurement wh, arenPt
all of our organiIation /erforming at J+est:in:classK le0elsR )h, are some of
our organiIations leading the /ac( while others are falling +ehind and some
wa, +ehindR According to Ha,s, )heelwright, and lar( C
1yna!ic Man"*act"ring+
Creating the Learning 2rgani3ation
D, it could 0er, well +e a matter of
too much data and not enough informationB JMeasurements can /ro0ide
useful information to managers who are tr,ing to identif, the sources of their
I
<>
/ro+lems or the reasons for their success. $ut most measurement s,stems in
/lace toda, do not /ro0ide the (ind of information needed +, com/anies that
see( to create a com/etiti0e ad0antage through manufacturing.K
@
This cha/ter
will e"/lore some measurement formats that will enlighten us a+out this
situation and will e"/lain wh, an understanding of human +eha0ior /la,s as
much of a 0ital role in the success of /erformance im/ro0ement as the metrics
themsel0es.
)e are what we measure. XIm/ro0ement comes onl, from that which
is 0isi+le. XA hidden /ro+lem re0eals nothing. Although these statements
ha0e an element of truth to them, the real /ower of measurement comes
from an indi0idualPs understanding of the measurement itself. The real tric(
to im/ro0ing /erformance comes from an indi0idualPs de2nition, de0elo/ment,
control, and understanding of cause and e1ect as the, are related to
the metric. Metrics that are de0elo/ed +, an outside entit, and forced on a
cell team are not li(el, to /roduce desired results. Metrics de2ned and de0elo/ed
+, a cell team ha0e a higher li(elihood of resulting in a /ositi0e correlation
+etween acti0it, on the sho/ Loor and desired /erformance.
Understanding of the measurement, ownershi/ of its results, and control
o0er the factors that ma(e it rise or fall are all im/ortant features necessar,
for the successful de/lo,ment of a measurement s,stem.
This area of measurement will +e loo(ed at from se0eral di1erent /ers/ecti0esB
7. *uPont model Ca com/an, 0iewD
3. Hut/ut:+ased measures Ca cell teamPs resultsD
5. Process:dri0en measures Cin2nite continuous im/ro0ementD
6. 9oal alignment through /olic, de/lo,ment
;. Measurement de2nition and understanding C/ower to the /eo/leD
4uPont Model: A &ompany +ie-
The *uPont model C-igure 6.7D, which was de0elo/ed +, a -rench engineer
in the 7=64s, is an e"cellent tool to use to generate a Jwhat if K anal,sis utiliIing
a com/an,Ps income statement and the +alance sheet. These time:honored
instruments of the 2nancial communit, are /i0otal documents for reLecting
the o0erall health of a com/an,. It is through the intersection of these documents
that the *uPont model +ecomes 0alua+le as a /erformance measure.
Metrics le!ent
<6
$eginning &et Assets
;igure =/7 4uPont Model
<?
$, +uilding relationshi/s +etween /articular line items it is /ossi+le to
/roduce se0eral di1erent ratios as indicators of /erformance trends. In addition
to monitoring trends, these ratios can ser0e as /oints of reference for
industr, com/arisons, as well as a guide for esta+lishing o/erational goals.
Achie0ement of these goals can +e /la,ed out through a Jwhat ifK scenario to
determine whether im/ro0ement through a change in sales, an increase in
asset turno0er, or lower in0entor, le0els will su//ort o/erational o+Fecti0es.
-or e"am/le, if the /lant can reduce in0entor, +, 37W, then total assets
will decrease and the asset turno0er ratio will increase +, =W. )ith all other
elements remaining equal, this will im/ro0e the return on in0estment C!HID
calculation +, ;W. A second e"am/le would +e if the cost of goods sold
CH9SD is reduced +, <W, then total costs will decrease and net /ro2t will
im/ro0e +, 6W. )ith all other elements remaining equal, this will im/ro0e
the /ro2t margin calculation +, 3W.
This /erformance measurement method is useful at the to/ le0el within
an organiIation to esta+lish o0erall goals and o+Fecti0es within the +usiness.
It is not designed for use at the cell le0el, where 2nancial measurements tend
to +e less tangi+le. At the sho/ Loor, in most cases it is +etter to utiliIe more
tangi+le, /h,sical measures of /erformance.
utput3Based Measurements:
A &ell "eamLs Results
T,/icall,, the onl, e"isting e0idence of measures on the sho/ Loor are measures
+ased on /erformance for a s/eci2c indi0idual em/lo,ee or /iece of
equi/ment Ce.g., how man, hours were /ut in ,esterda, +, -red, or how
man, /arts came o1 machine num+er 65; last shift, or what the ,ield of the
drilling /rocess was last hourD. These are all measures of how a /articular
ste/ in the /rocess is /erforming, and the, focus on what is called
locali3e&
o)ti!i3ation
. om/anies monitor indi0idual o/erations in the manufacturing
/rocess and assign accounta+ilit, and ta(e correcti0e action +ased on
them. The /ro+lem with this t,/e of measurement is that itB C7D dri0es the
wrong +eha0ior for continuous im/ro0ement, C3D does not reall, ha0e /roduct
accounta+ilit, focused on the customer, and C5D rewards o/timiIation of
the indi0idual o/eration +, sacri2cing /erformance of the /rocess as a whole.
Again referring to Ha,s, )heelwright, and lar( C
D, on the su+Fect of /roduct:focused 0s.
/rocess:focused o/erationsB JA /roduct focus, on the other hand, is generall,
easier to manage +ecause of its smaller siIe and total res/onsi+ilit, for a
Metrics le!ent
<@
/articular /roduct or customer. This usuall, results in shorter c,cle times,
faster res/onse to mar(et changes, less in0entor,, lower logistics costs, and,
of course, lower o0erhead.K
@
-ollowing this theme of +eing /roduct focused, a more e1ecti0e measurement
s,stem would +e one that esta+lishes out/ut:+ased measurements for
the cell team around tangi+le /roducts that go to a customer. These t,/es of
measures /ro0ide feed+ac( on the /erformance of the o0erall /rocess relati0e
to the customer. Hut/ut:+ased measures assign accounta+ilit, for all the
o/erations contained within the manufacturing /rocess. !es/onsi+ilit, is
Jcradle to gra0eK for the /roduct. A focus on out/ut measures dri0es continuous
im/ro0ement in that someone is accounta+le to an end customer
for the /erformance of a /roduct and has the res/onsi+ilit, to correct an,
/ro+lems encountered +, that customer.
Two measures that can alwa,s +e used as out/ut measures are /roduct qualit,
Ce.g., ,ield, defects /er unit, returnsD and /roduct deli0er,. Lac( of /erformance
in these areas a1ects the customer /h,sicall,. Price is o+0iousl, another
measureM howe0er, it does not /h,sicall, a1ect the customer the same wa, as
not ha0ing a /roduct or ha0ing a /roduct that does not wor(. These measures
can usuall, +e esta+lished quite easil,M the diUcult /art is determining
organiIational
accounta+ilit, for the /erformance. If the com/an, fails to address
this alignment, the /rogress toward continuous im/ro0ement will +e limited
to localiIed o/timiIation and the o/eration will miss the +ig o//ortunit,.
Process34ri(en Measures:
In)nite &ontinuous Impro(ement
There are two other measurements worth, of discussion which are readil,
understood +, the sho/ Loor and can +e utiliIed to dri0e continuous
im/ro0ement
+eha0ior. Hne is /rocess c,cle time and the other is /rocess qualit,
measured 0ia roll:through ,ield C-igure 6.3D. !oll:through ,ield is the cumulati0e
/erformance of each o/eration in a /rocess. The idea here is that, if a
com/an, is +uilding +etter and +etter /roducts and deli0ering them in less
and less time, then there should +e a /ositi0e correlation to total /roduct cost.
If ,ou are s/ending less time rewor(ing defects, re/lacing scra//ed material,
mo0ing assem+lies around the sho/, and waiting for com/onent /arts, then
o0erall /roducti0it, will im/ro0e. )hen a manufacturing o/eration allows
onl, 2rst:qualit, /roducts to /roceed to the ne"t o/eration and does not let
material sit around in the sho/, then the organiIation is focusing its e1orts
on the acti0ities necessar, to sustain continuous im/ro0ement.
=A
Goal Alignment "$roug$ Policy 4eployment
)e ha0e met the enem, and he is usY An,one who has tried to align a
+ureaucrac, and mo0e it in one direction can certainl, relate to this statement.
$etween the +usiness /olitics, functional silos, misinformation, and
lac( of information, it can +e quite the chore. How, then, does one accom/lish
this seemingl, unachie0a+le tas(R It can +e done through the use of
consistent /olic, de/lo,ment. Another term would +e
(oshin )lanning
,
which was originall, used +, the Ga/anese C-igure 6.5D. The maFor intent
+ehind /olic, de/lo,ment is to steer an entire organiIation in the same
o0erall direction. )hen an entire organiIation is /ulling in the same direction,
it is much easier to ta(e correcti0e action and adFust the course. If a
com/an, is /ulling in se0eral di1erent directions, not onl, does it use u/ a
tremendous amount of energ,, +ut it also is more diUcult to realign to a
new direction.
As a com/an, +egins to de2ne its direction through a sim/le mission
statement, it must esta+lish a strateg, that achie0es that mission. In turn, this
strateg, +ecomes su//orted +, s/eci2c o/erational o+Fecti0es that must +e
e"ecuted and coordinated across the organiIation. It is at this /oint that
alignment through /olic, de/lo,ment is required. Polic, de/lo,ment can +e
com/ared to requirements cascading down a staircase. At each le0el within
the +usiness, a se/arate set of o+Fecti0es and goals can +e de2ned. A statement
of the o+Fecti0es at a di0ision le0el would +e di1erent than those at a
de/artment
or sho/ Loor le0elM ne0ertheless, the, can all +e aligned to the same
com/an, o+Fecti0e. -or instance, A$ om/an, wants to increase mar(et
share +, 74W in a /articular segment of the glo+e, and the, ha0e determined
;igure =/: Process34ri(en Metrics
Metrics le!ent
=7
that the wa, to accom/lish this is through im/ro0ing the s/eed of /roduct
deli0er, to the customer. This requires a /erformance change from a 5:wee(
lead:time down to 7 wee(. In order to achie0e this, manufacturing and
/urchasing ha0e s/eci2c actions the, must ta(e that su//ort this com/an,
o+Fecti0e. Manufacturing needs to re0iew how /roduct is Lowing through
the factor, toda, and see where the, ha0e waste in the /rocess. The, need
to 0erif, if the necessar, s(ills and ca/acit, are a0aila+le to handle the
increased 0olume. Purchasing needs to wor( with the su//lier +ase to reduce
re/lenishment lead:time so in0entor, le0els do not rise along with the
increased 0olume and to ma(e sure that communication channels for changes
in demand are timel,.
The demonstrated alignment of these o+Fecti0es in the /lanning stages
and the constant communication feed+ac( during im/lementation allow
/olic, de/lo,ment to wor(. It /ro0ides total 0isi+ilit, to the organiIation so
that e0er,one can see where the, 2t into the success of the com/an,. It focuses
the organiIation on /lanning the wor( and wor(ing the /lan. The regular
re/orting of /rogress is necessar, in order to understand the current status
and to ta(e correcti0e action. HrganiIations are a s/ider we+ of
interrelationshi/sM
therefore, it is im/erati0e that each function understands the
im/act of +usiness changes on the other functions.
;igure =/< ,os$in Planning Process
=:
An organiIation should limit itself to three to 20e com/an,:wide initiati0es
at an, one time. An, more than that lea0es a /late that is too full and
detracts from the o0erall focus of the com/an,. There will +e too man, Z7
/riorities and not enough resources to co0er all commitments. Initiati0es will
ta(e longer to com/lete, and the qualit, of the deli0era+les will su1er. Nee/
the /late managea+le. As one /roFect 2nishes u/, add a new initiati0e and
dri0e each to com/letion. Polic, de/lo,ment does not guarantee that a com/an,
will ma(e its goalsM howe0er, it is /racticall, guaranteed that a com/an,
will not reach its goals if it cannot e0en achie0e them on /a/er.
Measurement 4e)nition and .nderstanding
Indi0iduals are more li(el, to stri0e and achie0e a /erformance target the,
understand as o//osed to one the, do not. If measures are +eing /osted in a
wor( area +, an outside entit, and are not com/letel, understood +, those
+eing measured, it is not li(el, that /erformance in that area will im/ro0e. If
/eo/le cannot descri+e their measure of /erformance, do not own that measure,
do not re/ort on the measure, nor understand cause and e1ect relati0e
to the measure, then it is unrealistic to e"/ect the measure to im/ro0e. Here,
we can draw u/on the e"/erience of Gohn 9. $elcher, long:time 0ice /resident
of the American Producti0it, enter, who stated in his +oo(,
Pro&"ctivity Pl"s+
(ow To&ay7s Best R"n Co!)anies Are Gaining the Co!)etitive &ge
B JAn organiIation
that tries to realiIe signi2cant /roducti0it, im/ro0ement without the
/artici/ation and su//ort of its em/lo,ees is wor(ing against itself. It doesnPt
ma(e much sense to em+ar( u/on a maFor underta(ing when the +ul( of the
organiIation misunderstands E or worse ,et, resists E the o+Fect of that
underta(ing.K
7
In order for a cell team measurement s,stem to wor(, it is
necessar, that the metrics +e de2ned, owned, controlled, monitored, and
understood +, those using the measure C-igure 6.6D.
;igure =/= Measurement 2Cecti(es
Metrics le!ent
=<
To engage indi0iduals in the im/ro0ement /rocess, the, must +e /art of
the de0elo/ment of that /rocess. The, need to understand where the, 2t in
and how the, a1ect the outcome. It does no good to create a metric in a
0acuum, +ring it to the Loor, /ro0ide no de2nition as to what the measure
means, collect the data o1:line, ha0e someone outside the area re/ort on the
metric, and then e"/ect /eo/le to im/ro0e their /erformance.
To o0ercome this tendenc,, it is ad0isa+le to select a handful of desired
outcomes Cthree to 20eD and wor( with the cell team to de0elo/ a//ro/riate
measures for those desired outcomes. *o not clutter an area with the to/ 3;
measures for that o/eration. -irst of all, such /ostings ta(e u/ s/ace and get
in the wa,M second, the, are not as meaningful to those in the cell. -acilitate
agreement among the team a+out common de2nitions, identif, where the
data will come from, select those who will re/ort /rogress, and esta+lish an
e"/ected target /erformance le0el. $e sure to /ro0ide insight as to how
/erformance of the measure can +e im/ro0ed in relationshi/ to the desired
target le0el. It does no good to e"/ect a target le0el that no one (nows how
to achie0e.
$e cogniIant of the fact that the measurement s,stem that is de0elo/ed
+ased on the needs of toda, could change to meet the needs of tomorrow.
Measurements will change +ased on the mar(et, the customer, di1erent le0els
of /erformance, and changing com/etiti0e /riorities. Again referring to
Making
Man"*act"ring Cells $ork
+, Ingersoll .ngineers, change is a constant,
and loc(ing into one /articular measure toda, could render a com/an,
uncom/etiti0e tomorrowB JAn, change in items such as /roduct, deli0er,,
machines, or tooling ma, well cause changes in the need for certain t,/es of
/erformance measures. om/anies mo0e ra/idl, into and out of mar(ets
and otherwise change +usiness strateg, to adFust to e0er:changing com/etiti0e
/ressures, and e"isting /erformance measurements must +e continuall,
re0iewed in res/onse to these changes.K
75
This cha/ter has focused on a short list of metrics that can e1ecti0el,
guide an organiIation on its /ath to sustained continuous im/ro0ement. It
has demonstrated how the sho/ Loor can +e lin(ed to a com/an,Ps o/erational
o+Fecti0es. It has also tried to em/hasiIe the element of measurement
that requires an understanding of human +eha0ior and its im/act on desired
/erformance. The ne"t cha/ter +egins to re0eal where these measures can
wor( as control /oints in monitoring /erformance +etween customers and
su//liers.
=5
5
'ogistics Element
t is now time to address the element re/resenting the greatest o/erational
challenge E Logistics. This is the area in which all the old rules of
o/erating the sho/ Loor are challenged. This is where the turf wars are
fought, functional silos are +rought down, indi0idual (ingdoms are
destro,ed, worlds are dominated, uni0erses are lost X well, ma,+e not quite
that +ig a challenge. &e0ertheless, now that res/onsi+ilit, and accounta+ilit,
ha0e +een dri0en down to a lower le0el within the com/an,, a di1erent set
of rules a//lies and some new techniques will need to +e utiliIed.
This new wa, of doing +usiness in0ol0es changing not onl, the formal
documented /rocess for /lanning and control, +ut also the informal, timetested
sho/Loor rules that ha0e +een ingrained within the organiIationPs
culture o0er the ,ears. Therefore, a lean manufacturing im/lementation is
not onl, changing documented /rocedures and /h,sical material handling
methods, +ut it is also /lacing stress on an informal s,stem that has +een
used for ,ears. This informal s,stem is usuall, more diUcult to com+at.
To a//reciate how strong the informal s,stem within an organiIation can
+e, as( ,ourself how quic(l, and e1ecti0el, rumors /ass through ,our
organiIation.
.nough said. This +eing the case, it +ecomes /ainfull, o+0ious that
the communication /lan Cidenti2ed in ha/ter 5D is of /aramount im/ortance
to the success of an im/lementation. .m/lo,ees need to understand
wh, their informal s,stem is +eing challenged and what this im/ending
change will do to a1ect their wor( /lace.
This term
logistics
can mean se0eral di1erent things to di1erent /eo/le,
so we will clarif, its de2nition here. The term, in this conte"t, refers to those
o/erational elements required to transfer wor( to a cell, through that cell,
and from one cell to the ne"t. It is /rimaril, those in:+ound, internal, and
out:+ound as/ects of /lanning and controlling the Low of wor( that are
I
=>
in0ol0ed in this element. -ollowing is a descri/tion of the sco/e of each of
these as/ects E in:+ound, internal, out:+ound C-igure ;.7DB
7.
8n6bo"n&
includes all acti0ities related to getting raw material, /rocured
items, and other direct or indirect manufacturing items to their
res/ecti0e /laces of consum/tion. -unctions such as /rocurement and
su+contract management and items such as engineering drawings,
/rocess s/eci2cations, and tooling are all associated with in:+ound
logistics.
3.
8nternal
has to do with those items required to facilitate the Low of
wor( through the cell. These items in0ol0e cell team mem+ers Ce.g.,
cell leader, /roduction engineer, sho/ touch la+or, /roduction controlD
and include such /h,sical elements as materials or /urchased
/arts, /roduction tooling, equi/ment, Nan+ans, /riorit, listings, etc.
5.
2"t6bo"n&
relates to those items required to e"it from the su//lier
cell and arri0e at a customer or customer cell. Items such as customer
identi2cation, a negotiated deli0er, quantit,, (it de2nition, su//lierheld
in0entor,, mode of trans/ortation, ownershi/ e"change /oints,
etc. are all areas of focus for this as/ect.
&ow that a general idea of sco/e and +oundar, has +een esta+lished, the
0arious /rinci/les in0ol0ed with the logistics /rocess can +e e"/lored indi0iduall,.
Hur focus in this cha/ter will +e onB
;igure 5/7 'ogistics Scope
Im&rove the &rocesses '!
$hich materials( &urchased
&arts( tooling( engineering
data are &rovided to the cell)
Im&rove the material *o$
of com&onents to( through(
and onto the next cell)
Im&rove the customer+
su&&lier relationshi&s
'et$een the cell and
its customer 'ase)
In3Bound
Items:
J Parts
J 4ra-ings
J "ools
Internal
Mem2ers:
J &ell leader
J Prod/ &ontrol
J perators
ut3Bound
Items:
J Products
J "ransportation
J Information
Logistics le!ent
=6
7. Planning/control function
a. Priorit, /lanning Cforward /lanD
+. a/acit, /lanning Cwor(loadD
c. a/acit, control Cin/ut/out/ut controlD
d. Priorit, control Cdis/atch listD
3. A,$, material handling
5. Ser0ice cells
6. ustomer/su//lier alignment
;. Gust:in:time CGITD Nan+an demand signals
?. ell team wor( /lan
<. Le0el loading
@. Mi":model manufacturing
=. )or(a+le wor(
Planning0&ontrol ;unction
The /lanning/control function e"ercised within a cell can go +, se0eral names
Ce.g., constraint scheduling, release and control, wor(Low managementD and
,et still mean the same in terms of functionalit,. The /lanning/control function
descri+ed here requires that s/eci2c wor( rules +e utiliIed during the
o/eration of a cell. !emem+er that the Logistics element has as much to do
with changes in wor( rules as it does with /h,sical /rocess changes. ."am/les
of some of the standard o/erational wor( rules ma, includeB
A
*o not load the cell equi/ment o0er =4W of demonstrated ca/acit,.
A
*o not release wor( inside a0erage actual lead:time.
A
!elease onl, wor(a+le wor( to the cell.
A
Sequence wor( +, using 2rst:in/2rst:out /rioritiIation.
A
*o not release wor( without an authoriIing Nan+an.
These are o/erational wor( rules that are to +e de0elo/ed, de2ned, and
documented +, the cell team mem+ers. Through the education and training
Crecei0ed 0ia the HrganiIation elementD, the cell team will ha0e a +etter
understanding of the need for new wor( rules, and, +ecause the, ha0e
de0elo/ed
and de2ned those rules, there is greater ownershi/ for them as a team.
These wor( rules are not intended so much to reduce Le"i+ilit, as the, are
to facilitate consistenc,, structure, and continuit, among team mem+ers for
o/erations of the cell. This colla+orati0e a//roach to wor( rules in actualit,
will enhance +oth the res/onsi0eness and /redicta+ilit, of cell /erformance,
es/eciall, within a multi:shift en0ironment.
=?
Planning and control are critical functions that contri+ute to the successful
im/lementation of the cell. Hften times, those indi0iduals onl, focusing
on utiliIing Fust:in:time CGITD and Nan+an material /ull o0erloo( these functions.
The initial im/lementation and su+sequent da,:to:da, o/erations of
a cell are greatl, inLuenced +,B C7D how e"ecuta+le the /lan is, and C3D how
ro+ust the control mechanism is. There e"ists a strong relationshi/ +etween
these functions, as the +etter the /lanning e1ort, the easier the control e1ort.
The criticalit, of this relationshi/ was em/hasiIed +, the Ga/anese master of
/roduction engineering, Shingo Shigeo C
/on6Stock Pro&"ction+ The Shingo
Syste! *or Contin"o"s 8!)rove!ent
DB JIf the /lanning le0el is a+out @4 /ercent,
control /recision need onl, +e around 34 /ercent. If the /lanning le0el
is a+out ;4 /ercent, control /recision needs to +e around ;4 /ercent.K
34
There
are four +asic as/ects to /lanning/control within a cell C-igure ;.3D, and each
is e"/lained in detail in the following discussion.
Priorit! Planning ,-or$ard Plan.
This as/ect is concerned with /lanned or future wor(load requirements,
which are normall, fed to the cell +, a manufacturing resource /lanning
CM!P IID or some other requirements /lanning s,stem. Lean manufacturing
in no wa, a+olishes the need for requirements /lanningM rather, it actuall,
requires it in order toB C7D esta+lish cell design criteria, C3D /lan short:term
wor(loads C7 to 6 wee(sD, C5D /erform ma(e/+u, anal,ses, and C6D communicate
future demand needs to u/stream su//liers. A com/an,Ps current
requirements /lanning s,stem is usuall, adequate enough to /ro0ide the
required information for a lean manufacturing en0ironment.
;igure 5/: Aspects of Planning and &ontrol
Logistics le!ent
=@
Ca&acit! Planning ,orkload.
This function is necessar, for the cell team to re0iew and agree u/on the
u/coming wor(load, man/ower, and o0ertime requirements necessar, to
satisf, customer /erformance e"/ectations. This ca/a+ilit, allows the cell
team to determine its own destin, and /ro0ide in/ut into the decision /rocess
that controls end /roduct /erformance. The cell le0el 0isi+ilit, to future
wor(load Luctuations can then +e mitigated +, the cell team through le0el
loading, o1:loading, lot siIe s/litting, /lanned o0ertime, etc.
Ca&acit! Control ,In&ut+Out&ut Control.
The cell team is held accounta+le to manage /erformance to /lan. a/acit,
control is used as a control de0ice to /ro0ide the cell team with the ca/a+ilit,
to maintain wor(load 0isi+ilit, and monitor /rogress to /lan. The, are gi0en
the o//ortunit, to ta(e credit for achie0ing an o/erational goal or are /ro0ided
with the a+ilit, to ta(e swift correcti0e action when /erformance is
falling o1 the mar(. Managing queue siIes is /aramount to meeting leadtime
commitments. If actual queues are e"ceeding /lan, then /romise dates
to customers will +e missed and customer con2dence will diminish. Leadtime
0aria+ilit, Ca true menace to man, deli0er, /ro+lemsD is a direct reLection
of how well actual queue times are (e/t in control.
Priorit! Control ,/is&atch 0ist.
The sequence +, which wor( is introduced to the cell will +e a function of
three thingsB C7D Is there a customer demandR .0en though there is a /lanned
requirement for an item, until there is a demand /ull signal from the customer,
there is no real need for the item. C3D Is there enough ca/acit,R Until
ca/acit, has +een cleared or a Nan+an container +ecomes a0aila+le to introduce
more wor( into the cell, it cannot release wor(. If wor( was released,
wor( in /rocess would increase +e,ond the cell design /arameters, queues
would grow, and lead:time would increase. C5D Is the wor( /ac(age a0aila+leR
Unless all the items necessar, to wor( a Fo+ ha0e +een made a0aila+le, wor(
cannot +e released to the cell. If incom/lete wor( /ac(ages were released to
the cell, the, would e0entuall, sto/. The, then would ha0e to wait for
resources to +e a//lied to +rea( it loose, and the wor(Low would +egin to
+ac(log.
5A
A#B#& Material ,andling
In a lean en0ironment, controlling the Low of material and managing in0entor,
will change under the new o/erating rules for material handling. Instead of
managing each and e0er, /art e"actl, the same wa,, /arts will +e reclassi2ed
+ased on their demand +eha0ior characteristics. -or instance, a large, com/le"
machined /art weighing ;44 /ounds with 744 hours of machine time would
+e scheduled and controlled di1erentl, than a nic(el/dime cli/ or +rac(et. The
amount of time, mone,, and resources required to manage in0entor, should
+e com/ara+le to the +eha0ior characteristics of the /art or com/onents. Parts
should +e strati2ed according to a gi0en criteria so that an a//ro/riate amount
of e1ort is e"/ended on managing the /art re/lenishment /rocess.
Parts or com/onents can +e segregated along an A,$, t,/e of classi2cation
C-igure ;.5D. This a//roach di1ers slightl, from ParetoPs @4/34 ruleM
howe0er, the a0erage /art /o/ulation still falls along the normal 7;/5;/;4
/ercentage s/lit. -or e"am/le, /arts that are e"/ensi0e, more com/le" to
+uild, and often e"hi+it long lead:times should +e considered JAK /arts. The,
should +e scheduled with su//liers either C7D with trans/ortation /i/eline
Nan+ans Ces/eciall, with high:0olume /roductD, or C3D directl, through M!P
II Cfor low:0olume /roductD, Fust as in most /lants toda,. J$K /arts are usuall,
less com/le", ha0e shorter and more /redicta+le lead:times, are less e"/ensi0e,
and are small enough to +e (itted Cif requiredD. These can +e re/lenished
0ia Nan+ans and can /ossi+l, +e +uilt on demand. These /arts could +e +uilt
;igure 5/< A#B#& Material ,andling
Logistics le!ent
57
and deli0ered in negotiated +atch siIes or in /redetermined (its Cif requiredD.
If the demand 0olume is low or highl, 0aria+le, it ma, ma(e more sense to
re/lenish these /arts 0ia M!P II or through nonre/etiti0e Nan+ans. $, far
the maForit, of /arts C;4WD would 2nd themsel0es in the JK categor, and
could +e managed directl, through a 0endor:managed reorder /oint or Nan+an
s,stem. These /arts would a//ear on the +ill of material, +ut would not
+e scheduled /er M!P II and therefore would require minimal man/ower
to manage.
Ser(ice &ells
In an ideal world, all /arts would +e manufactured com/lete within a gi0en
cell. All the necessar, manufacturing /rocesses would +e located in that cell
and the /arts would ne0er ha0e to lea0e the cell. !aw material would come
in and a com/letel, 2nished /art Cread, for consum/tion +, the customerD
would go out the other side. &ow, if ,ou currentl, ha0e this scenario o/erating
within ,our /lant, then /ass +, this section +ecause it does not a//l,
to ,ou. Howe0er, if ,ou are li(e the maForit, of the manufacturing communit,,
,ou certainl, do not ha0e enough ca/ital to full, /o/ulate ,our cells in
this manner. This section will /ro0ide an o/tion for ,our facilit,.
Ha0e ,ou e0er +een to a dr,cleaner with a load of shirts and read the sign
out front, JIn +, =, out +, ;RK Ha0e ,ou e0er +een to a train station and
ridden on a trainR *id ,ou notice how the conductor continuall, chec(s his
watch and monitors the time in the stationR He is ma(ing sure the train
enters and lea0es the station on time. At @B44 a.m., for e"am/le, announcing
Jall a+oardK indicates that the train is lea0ing the station. An,one there can
+oard, and those who are not there will ha0e to wait until the ne"t scheduled
train arri0es. )hat if certain ca/ital:intensi0e manufacturing o/erations were
set u/ to run in the same mannerR The a+o0e:mentioned scenarios descri+e
two t,/es of rules that can a//l, with ser0ice cells C-igure ;.6D. These ser0ice
areas are designed to su//ort cells that are manufacturing /roducts. Their
o+Fecti0e is to satisf, the needs of the manufacturing cells and to /ro0ide a
/redetermined le0el of ser0ice or turnaround for a /articular /rocess.
$ecause, as we learned earlier, manufacturing cells are accounta+le for the
/roduct from cradle to gra0e, the, +ecome highl, de/endent on ser0ice cells
to /ro0ide consistent, /redicta+le /rocess turnaround. This le0el of de/endenc,
strengthens the customer/su//lier relationshi/ and ties in directl, with
the Metrics element that we e"/lored in ha/ter 6.
5:
&ustomer0Supplier Alignment
)hen com/anies /a, homage to the terms
c"sto!ers
and
s"))liers
, it is
normall, the t,/e of Jmotherhood and a//le /ieK li/ ser0ice that does not
mean much in the wa, of su+stance. In order for lean manufacturing to trul,
function, direct lines of communication +etween customers and su//liers
must +e identi2ed and strengthened. -or e0er, /roduct /roduced within a
manufacturing cell, there is a corres/onding customer or customer cell that
will +e consuming that /roduct. )hether the su//lier cell is /art of an
internal customer/su//lier relationshi/ within a multi:/lant facilit, or /art
of a larger su//l, chain in0ol0ing se0eral di1erent com/anies, the same adage
a//liesB alignment with the customer. ell mem+ers should recogniIe who
utiliIes their /arts and (now if those /arts are satisf,ing the customerPs 2t,
form, and function requirements. Are the, /ac(aged correctl,R Is there a
+etter (itting /rocedure that could +e utiliIedR an we negotiate a +etter
deli0er, quantit, to hel/ our total /roduct costR )ho do the, call when there
is a qualit, /ro+lem with the last /arts that were recei0edR These are all
legitimate questions that can +e as(ed and answered when there is direct
alignment +etween customers and su//liers.
Hne wa, to +egin esta+lishing this alignment relationshi/ is toB
7. !un a Jwhere used/recei0ed fromK list o1 the +ill of material for all
/arts/com/onents that are assigned to a gi0en cell.
3. Sort the /arts +, four categoriesB customer, 0olume, cost, and destination,
which allows /rioritiIing in0estigati0e e1orts.
5. all on the +iggest customers or su//liers 2rst to assess their needs
and +egin negotiating wa,s of im/ro0ing the su//l, chain.
;igure 5/= Ser(ice &ell Relations$ip
Logistics le!ent
5<
In addition to ca/turing the /art num+ers, a /rocess ma/ of the acti0ities
for the cell can +e 0er, useful. $, utiliIing a format of su//lier:in/ut:
/rocessout/ut:
customer CSIPHD, a great deal of information can +e o+tained in
regard to in/ut requirements for the /rocess and out/ut requirements of the
customer. $, ca/turing the (e, acti0ities within a /rocess Ce.g., a cell, su//lier
interface, shi//ing, order administrationD and categoriIing them according
to 0alue:adding or non:0alue:adding, signi2cant insight into the /erformance
of a /rocess can +e o+tained. !emem+er that this is documenting
acti0ities, not tas(s. Nee/ing the /rocess ma/ at the a//ro/riate le0el of detail
can +e diUcult. Acti0ities are focused on the 0er+:noun Caction to an o+FectD
relationshi/ of functions in a /rocess, while tas(s are more the /roceduralle0el
ste/s for those acti0ities. To (ee/ this distinction straight, tr, using the
guidelines set +, ol(ins in his
Activity6Base& Cost Manage!ent+ Making 8t
$ork+ A Manager7s G"i&e to 8!)le!enting an& S"staining an 9ective ABC
Syste!
B JA good rule is to thin( of acti0ities as what /eo/le do and the tas(s
that ma(e u/ acti0ities as how the /eo/le /erform acti0ities.K
3
Must3in3"ime FMI"G Ban2an 4emand Signals
A multitude of methods can +e e"ercised when utiliIing /ull signals C-igure
;.;D. The, include cards, standard containers, em/t, squares on the sho/
Loor, electronic messages Ce.g., fa"es, e:mails, .*I, e:commerceD, among
;igure 5/5 Must3in3"ime FMI"G 4emand Pull Signals
5=
others. All of these methods ha0e se0eral as/ects in common. -irst, the
demand signal re/resents the authoriIation to +egin wor(. Second, no Fo+ is
to +e released for wor( without a demand authoriIation from the customer.
Third, the demand signal controls the amount of wor( in /rocess allowed in
the su//l, chain. -ourth, the num+er of Nan+ans in the s,stem will determine
the amount of wor( in /rocess for the chain. This scenario gi0es the cell the
a+ilit, to control 0aria+ilit, in lead:times, as queues are una+le to grow
+e,ond the num+er of calculated Nan+ans. -ifth, no one is allowed to (nowingl,
/ass defects on to the ne"t o/erationM defects are to +e sto//ed when
the, are found and correcti0e action incor/orated immediatel,. Si"th, wor(Low
is /rioritiIed on a 2rst:in/2rst:out C-I-HD +asis. This not onl, a//lies
to the scheduling of wor( into the cell, +ut also the /h,sical handling of
material. The /h,sical in0entor, turno0er of material is Fust as im/ortant as
the 2nancial in0entor, turno0er of material. These as/ects of managing Nan+ans
are summariIed in the following rulesB
7. A Nan+an demand signal is the authoriIation to +egin wor(.
3. &o Fo+ is to +e released without demand from the customer.
5. The Nan+an controls the amount of wor( in /rocess allowed in the
Low.
6. The num+er of Nan+ans will control the manufacturing lead:time
through queue management.
;. *o not /ass (nown defects on.
?. UtiliIe 2rst:in/2rst:out C-I-HD material Low.
Nan+ans can +e set u/ +etween wor(stations, +etween wor(stations and
/oint:of:use CPHUD locations, +etween cells and central stores, +etween
assem+l, cells and fa+rication cells, +etween fa+rication cells and e"ternal
su//liers, and +etween assem+l, cells and customers. .ach relationshi/ will
ha0e its own indi0idual issues to address as to location, siIe, quantit,,
ownershi/,
shelf life, weight, etc. -or the /ur/oses of general discussion in this
section on methodolog,, there will +e two t,/es of Nan+an material /ulls,
one de/icted as intra:cell Cinternal to the cellD and one as inter:cell Ce"ternal
to the cellD. .ach has a relationshi/ with /roduction cells and the o0erall
o+Fecti0e for Nan+an demand signals.
The t,/e of Nan+an methodolog, de/lo,ed is 0er, de/endent on the
manufacturing
en0ironment, the rece/ti0it, to change of an organiIationPs culture,
and a su//lier/customerPs moti0ation for /artici/ation. The more diUcult the
en0ironment, the more ro+ust a /rocess required. &o one (nows the
manufacturing
en0ironment +etter than each indi0idual com/an,M therefore, each
Logistics le!ent
55
com/an, is in the +est /osition to determine which method to use. Howe0er,
no matter what method is chosen, the si" rules for managing Nan+ans still
a//l,.
&ell "eam *ork Plans
As was mentioned in ha/ter 5, a lean manufacturing cell o/erates as a team
com/letel, focused on deli0ering a /roduct to a customer. -or this team to
function as one cohesi0e unit, the, must agree on how the, will o/erate.
.arlier, in the /lanning/control section, the idea of a forward /lan was introduced.
This /lan /ro0ides a future loo( at the /roduction requirements
coming to the cell o0er the wee(. The cell team re0iews this forward /lan,
ensures that the, ha0e enough ca/acit, and resources to ma(e this /lan Cif
not, the, will ma(e the /ro/er adFustmentsD, and agree, as a grou/, to e"ecute
this /lan. This wa, there is +u,:in to the schedule +, all the team mem+ers.
The, own the /erformance o+Fecti0es for the ne"t wee( and the, ha0e
de0elo/ed
s,nerg, around the /lan.
This re0iew /rocess should ta(e /lace on a regular +asis Ce.g., wee(l,D and
+ecome /art of the routine management of the cell. The cell leader should
antici/ate facilitating this discussion, and the su//ort /ersonnel should /lan
on /erforming an anal,sis on the data +efore /resenting it at the meeting.
The meeting can then mo0e along eUcientl, and with little wasted e1ort.
This ma, a//ear to +e a sim/le, common:sense acti0it,, +ut it is sur/rising
how man, cell im/lementations ne0er utiliIe this acti0it, and later wonder
wh, the cell teams are not achie0ing the targeted o+Fecti0es and are Loundering
without a common focus.
'e(el 'oading
According to one of the leading authorities on su//l, chain management,
)illiam . o/acino, in his +oo(
S"))ly Chain Manage!ent+ The Basics an&
Beyon&
, there are four /rerequisites or /illars required for a GIT s,stem to
function /ro/erl,B JIf GIT logistics /lans are to wor(, four /illars must +e in
/lace X sta+le /roduction schedules, eUcient communication, coordinated
trans/ortation, qualit, control.K
6
It is one of these /rerequisites E a relati0el,
le0el /roduction schedule o0er a de2ned /eriod of time E that is the su+Fect
of this section. In order to align customer demand with ta(t time Csee ha/ter
?D, a need e"ists to le0el demand at a rate that is conduci0e for +oth the
su//lier and the customer.
5>
$, /resenting the customer:forecast information in units /er da, or wee(,
an understanding as to the demand /attern and 0olume 0ariation for a gi0en
set of /roducts can +e anal,Ied. This information /ro0ides insight into the
de0elo/ment of a le0el rate:+ased schedule for a /roduction cell. This le0el
rate:+ased schedule of demand o0er a gi0en /eriod of time is onl, for /roducts
that 2t a rate:+ased demand /attern which demonstrates a relati0el,
high 0olume of demand, a consistent customer order frequenc,, and limited
0olume Luctuation. $, utiliIing a rate:+ased schedule C-igure ;.?D, these
/roducts are scheduled less often Ce.g., once a monthD and are designed to
+e /roduced at a gi0en rate for a gi0en /eriod of time. !ealiIing that demand
does change, customer demand /atterns should +e monitored on a regular
+asis and the scheduled rate adFusted accordingl,.
To de0elo/ a rate:+ased schedule, ta(e the forecast information in units
+, da, or wee( and com/ute a monthl, a0erage. Then, com/are the forecast
monthl, a0erage to the +oo(ed orders and de0elo/ a rate of /roduction from
the higher of the two num+ers. This is done in order to +u1er against 0ariation
in customer demand. This methodolog, is similar to the total demand /rocess
tal(ed a+out +, ostanIa in
The :"ant"! Lea)+ 8n S)ee& to Market+
JThe
de2nition of total demand inside the *emand time fence is the sum of actual
customer and 2nished goods re/lenishment orders. Total demand outside the
*emand time fence is the greater of the forecast and actual customer orders.K
;
-rom this /oint, the /roduction cells can commit to a /roduction schedule
on a wee(l, +asis and +e held accounta+le for achie0ing their /lanned
out/ut. As was stated earlier, not e0er, /roduct has a demand /attern conduci0e
to rate:+ased scheduling, +ut for those that do, this can +e a 0er,
e1ecti0e methodolog,.
;igure 5/> Rate3Based Sc$edule
Logistics le!ent
56
Mix3Model Manufacturing
There are manufacturing cells with wor(stations that can +e designed to
/roduce a 0ariet, of /roducts and 0olumes o0er a gi0en time frame. These
cells are ca/a+le of /erforming what is (nown as mi":model manufacturing
C-igure ;.<D. The criteria for designing these t,/es of cells requires that the
/roduction /rocesses +e relati0el, consistent from /art to /art without a
signi2cant amount of 0ariation in the /rocess. In addition, these cells usuall,
contain a highl, Le"i+le wor(force, ha0e limited 0ariation +etween wor(
content times for each o/eration, and can change o0er +etween /roducts 0er,
ra/idl,.
Mi":model manufacturing /ro0ides the ultimate res/onsi0eness and utiliIation
of Loor s/ace. It su//orts ma(ing an, mi" of an, /roduct on an,
da, C/ro0ided the /roducts were designed for the cellD. Again, Schon+erger,
in his +oo(
;a)anese Man"*act"ring Techni-"es+ /ine Lessons in Si!)licity
,
descri+ed the /ositi0e e1ects of mi":model manufacturingB JAn ad0antage
of mi":model sequencing is that each da, ,ou ma(e close to the same mi"
of /roducts that ,ou sell that da,. This a0oids the usual c,cle of a large +uildu/
of in0entor, of a gi0en model, followed +, the de/letion to the /oint of
/otential lost sales as the ne"t model +uilds u/.K
7;
;igure 5/6 Mix3Model Manufacturing
5?
Hnce those manufacturing /rocesses that 2t the a+o0e:mentioned criteria
are grou/ed together in a cell, it is Fust a matter of understanding the /roduct
demand +eha0ior and segregating the mi" +ased on that +eha0ior. !ate:+ased
/roducts are made in the same amount e0er, da,. Nan+an re/lenishment
/roducts Coften 2nished:goods stoc(D are re/lenishments for Nan+ans as
demand requires. The ma(e:to:order or s/ecial /roducts will +e made when
there is enough ca/acit, remaining to /roduce those /roducts. $, scheduling
/roduct this wa,, one ma(es the most e1ecti0e use of s/ace, equi/ment,
/eo/le, time, material, etc. The conce/ts of runner, re/eater, and stranger,
which are a//lica+le to this methodolog,, will +e discussed in greater detail
in ha/ter ?.
*orka2le *ork
$orkable work
is a term that refers to those elements contained within the
manufacturing /rocess that are necessar, in order for wor( to +egin on a
/roduct C-igure ;.@D. .0er, manufacturing en0ironment will ha0e something
that is s/eci2call, required in order to +egin wor(M howe0er, all en0ironments
will ha0e the following elements in commonB C7D material, C3D tooling, C5D
;igure 5/? *orka2le *ork
Logistics le!ent
5@
wor( instructions, C6D demand, and C;D s(illed wor(ers. Most M!P II s,stems
are set u/ to /lan and release wor( to the sho/ Loor +ased on demand
information generated from the s,stem. Some ha0e a logic setu/ to chec( for
com/onent /art a0aila+ilit, +efore assem+l, orders are launched, +ut that is
normall, where it sto/s.
The /ro+lem that arises in man, /lants is that wor( is released to the
sho/ Loor without ha0ing 0eri2ed com/letel, that it is wor(a+le. -or e"am/le,
wor( order IS7356 is launched to the 2rst o/eration. The /art is +lan(ed
and mo0es on through o/erations two through 20eM howe0er, when it arri0es
at o/eration si", there is an issue. The tooling is out for re/air and not
a0aila+le to run this Fo+. )hat ha//ensR The Fo+ sits and waits until the
tooling is a0aila+le. This ha//ens e0er, da, in /lants, and the more com/le"
the manufacturing o/eration the more this launch:and:wait +eha0ior is e0ident.
Instilling an awareness of the conce/t of wor(a+le wor( sets in motion
a /rocess that 0eri2es the a0aila+ilit, of those critical elements required +,
manufacturing, +efore committing a Fo+ to the sho/ Loor, there+, eliminating
the dela,s and wait time that are so indicati0e of long manufacturing
lead:times.
The to/ic of logistics is a 0er, +road su+Fect matter that could easil, 2ll
an entire te"t+oo(. This cha/ter was onl, intended to co0er some of the
/rimar, as/ects that should +e addressed as /art of a lean manufacturing
im/lementation. &ow that we ha0e a greater a//reciation for the infrastructure
elements, it is time to address the element that is most familiar to /eo/le
E Manufacturing -low.
>7
>
Manufacturing
;lo- Element
ost /ractitioners within the 2eld of manufacturing can relate to
tangi+le, hard:fact t,/es of /roFects that indi0iduals can go and la,
their hands u/on, so to s/ea(. These are the t,/e of im/ro0ement
initiati0es most readil, em+raced and im/lemented. These /roFects are the
most 0isi+le, and the, are witnessed +, e0er,one within the organiIation.
This is wh, the idea of rearranging equi/ment and altering sho/Loor la,outs
is /ursued so /assionatel, +, man, manufacturing organiIations. Im/ro0ements
are easil, recogniIa+le, and it is o+0ious that change has ta(en /lace.
In order to win this /articular crowdPs acce/tance for a holistic a//roach to
lean manufacturing, hard:fact results must +e e0ident. This +eing the case,
this cha/ter /resents a series of cell design techniques +ased on hard:fact
material which should +e utiliIed when de/lo,ing a lean manufacturing
conce/t similar to the one descri+ed in this +oo(.
The following series of techniques is to +e used when assessing /roducts
and their associated /rocess Low and translating that data into usa+le
information
for generating a cell designB
7. Product/quantit, CP/SD anal,sis C/roduct grou/ingD
3. Process ma//ing
5. !outing anal,sis C/rocess, wor( content, 0olume matricesD
6. Ta(t time
;. )or(load +alancing and one:/iece Low
?. ell design guidelines
<. ell la,out
@. Nan+an siIing
M
>:
Product0Nuantity Analysis FProduct GroupingG
The 2rst ste/ in this /rocess is to gather and understand /roduct demand data
C-igure ?.7D. This is accom/lished +, generating a cumulati0e Pareto /ercentage,
+, 0olume, of all /roduct stoc((ee/ing units CSNUsD. These data items
originate at the customer and /ro0ide a +aseline +, which to +egin demand
+eha0ior anal,sis. AnnualiIed /roduct SNU demand data should +e segregated
on a monthl,/wee(l,/dail, demand +asis. The source of this information usuall,
comes from the +usiness /lan forecast Cin unitsD and co0ers a time horiIon
of ? to 73 months. $, dis/la,ing the cumulati0e /ercentage, +oth high: and
low:0olume /roducts +egin to /resent themsel0es. In addition to the forecast
data, it is im/ortant to consider the actual customer order sales data. *oing
so accounts for actual demand 0olume and mi" 0ariation, which is im/ortant
in/ut for the ta(t time calculation Cdiscussed later in this cha/terD.
The P/S anal,sis C-igure ?.3D loo(s for natural +rea(s in /roduct grou/ings
+, sorting the gathered data and determining a 2t for /roduction cells
+,B C7D their associated 0olumes, and C3D /roduct alignment characteristics.
This is usuall, an iterati0e /rocess and is conducted se0eral times in order
to determine a +est 2t for each cell t,/e. Product alignment characteristics
could include the following criteriaB
7. Align high:0olume /roducts together.
3. Align to s/eci2c customers, such as original equi/ment manufacturers
CH.MsD.
5. Align to s/eci2c target mar(ets.
6. Align to common manufacturing /rocesses.
;. Align to con2guration commonalit, CsiIe, material, function, etc.D.
?. Align to engineering content Cstandard 0s. s/ecialD.
;igure >/7 Product 4emand
/*a,
Man"*act"ring %low le!ent
><
After the /roducts ha0e +een identi2ed and segregated into /roduct
grou/ings, the, are sorted +, 0olume and /lotted on a chart. This chart
0isuall, dis/la,s the natural +rea(s in 0olume +, grou/. &ormall,, 64W of
the /roducts will account for ?4W of the /art 0olume Cthis is referred to as
the 64/?4 ruleD. )hen a /roduct grou/ing falls into this categor,, it is wise
to esta+lish dedicated Low lines/cells with segregated resources in su//ort of
this /roduct grou/ing. These /roducts are called
r"nner
/roducts +ecause
the, ha0e high 0olumes, frequent customer orders, and sta+le demand C-igure
?.5D. The remaining +alance of /roduct grou/ings will fall into one of
two categories. The 2rst grou/ 2ts a general /ur/ose or Le"i+le cellular
o/eration (nown as
re)eaters
. This categor, has a greater 0ariet, of /roducts,
which will +e /roduced across resources that are not dedicated to a s/eci2c
Low line. Parts that ha0e lower 0olume amounts, 0aria+le order frequenc,,
and/or high 0aria+ilit, in o/erational routings will 2nd their wa, into this
categor,. The second categor, is that of
strangers
. This categor, is for miscellaneous
items that are +eing /roduced within the /lant as one:o1 items
or that ha0e a 0er, low 0olume or infrequent Conce /er ,earD demand /attern.
These items are usuall, +est managed through M!P II and can +e segregated
from the rest of the factor, +,B
7. .sta+lishing se/arate /roduction area
3. !unning the /roducts once or twice /er month
5. !unning them when ca/acit, is a0aila+le
6. Hutsourcing the /roducts
;igure >/: P0N Analysis
>=
;. !unning them once /er ,ear and holding in 2nished:goods stoc(
?. Ma(ing one 2nal run and eliminating the item from current /roduct
o1ering
Hill, in his
The ssence o* 2)erations Manage!ent
, addresses this same idea
of segregating /roducts, onl, his focus is on the mar(et /laceB Jom/anies
need to recogniIe that low:, medium:, and high:0olume +atch /rocesses handle
a 0er, wide range of 0olumes with corres/ondingl, di1erent order:winners.
-or com/anies, therefore, to assume that the choice of one /rocess, e0en for
a single categor, such as +atch, will /ro0ide su//ort for the le0el of di0ersit,
associated with a normal range or /roducts/ser0ices is a mista(e.K
74
In either
case, whether +, /roduct alignment criteria or order winners, it is im/ortant
to recogniIe that all /roducts are not demanded the same and therefore should
not +e managed the same.
Process Mapping
Hnce the /roduct demand +eha0ior is understood, the ne"t area of anal,sis
is that of /rocess ma//ing. It is necessar, to (now what o/erations are
required to /roduce the /roducts +eing considered for cell design. In the end,
the 2nal design of the cell will need to account and accommodate for all
/rocess ste/s, whether accom/lished in the cell or not. $loc( /rocess ma//ing
C-igure ?.6D is usuall, conducted on the highest 0olume /roducts. The lower
;igure >/< Runner# Repeater# Stranger
Ad(antages:
Responsi(e lead3time
'o- unit cost
,ig$ e%uipment utili!ation
4isad(antage:
InIexi2le to (ariety
Ad(antage:
;lexi2le to (ariety
4isad(antages:
.nresponsi(e to lead3time
,ig$ unit cost
'o- e%uipment utili!ation
>5
0olume /roducts can +e ma//ed se/aratel, if the /rocess ste/s are signi2cantl,
di1erentM howe0er, this is usuall, not the case. $, actuall, wal(ing the
/rocess, documenting the ste/s, and tal(ing with the /rocess owners, a good
re/resentation of the /roduct Low and 0olume can +e documented.
In addition, to the +loc( /rocess ma/, a s/aghetti diagram C-igure ?.;D
is created in order to gras/ the magnitude of o/erator and material tra0el in
the current /rocess. The reason it is called a s/aghetti diagram is that +, the
;igure >/= Block Process Mapping
;igure >/5 Spag$etti 4iagram
Ra- materials
incoming
Slotting
operation
Bore
operation
"rigger assy/
operation
Greasing
operation
;inal assy/
operation
;inis$ed goods
outgoing
Spin test
operation
,eat3treat
operation
Manufacturing cell
>>
end of the e"ercise of recording the current /rocess the drawing loo(s li(e a
+owl full of s/aghetti. This sim/le technique is nothing more than drawing
the area under assessment, re/resenting the o/erator and material mo0ement
on /a/er with a colored mar(er, and measuring the amount of feet tra0eled
for +oth. )hat we can learn from this technique is 0er, illuminating. It is
not uncommon for an o/erator to +e tra0eling u/ to half a mile e0er, time
there is a need to gather tools and /arts to conduct a machine changeo0er.
These two tools are used as sources of in/ut during the cell design /rocess.
The, do a good Fo+ of ca/turing the Jas isK condition and 0isuall, dis/la,ing
what is actuall, ha//ening in the /rocess toda,. The, identif, signi2cant
o//ortunities for waste elimination or reduction and /ro0ide real data +,
which to ma(e decisions, rather than rel,ing u/on JI thin(XK or JI feelX .K
Routing Analysis FProcess# *ork
&ontent# +olume MatricesG
!outing anal,sis is nothing more than the assessment of wor(Low /atterns
and 0olume//rocess 0ariation. The 2rst ste/ in this anal,sis is the creation
of a /rocess matri" C-igure ?.?D. This is accom/lished +, /lacing the routings
for each /art of a /roduct on a grid. $, identif,ing all manufacturing /rocesses
across the to/ and listing /roducts down the side, a grid is created
where each /art routing can +e /h,sicall, drawn. $, dis/la,ing the wor(Low
in this manner, it is eas, to see /atterns of commonalit,, resource consum/tion,
and re0erse /art Low acti0it,. .ach of these items is an im/ortant factor
to consider when esta+lishing cell con2guration.
The /ur/ose of a wor( content matri" C-igure ?.<D is to gather rele0ant
man time, machine time, and setu/ time for a /articular /art /o/ulation. After
+eing collected, this +aseline information should +e loaded into a data+ase as
;igure >/> Process Matrix
>6
reference data for utiliIation during the cell design /rocess. This data+ase of
information can +e gathered in one of at least two di1erent wa,s. The 2rst is
strictl, a manual /rocess in which an industrial engineer will conduct a wor(
element anal,sis and com/lete a time o+ser0ation form CTH-M -igure ?.@D. The
;igure >/6 *ork &ontent Matrix
;igure >/? "ime 2ser(ation ;orm
>?
engineer will wal( the /rocess ma/ for each /art and record the actual
o/erational
data for each of the /rocess ste/s. The engineer will need to (ee/ trac(
of +oth the indi0idual o/eration time and the cumulati0e running total time.
*e/ending on the o/eration, a series of 20e to ten recordings should +e enough
to accuratel, reLect the /rocess. In addition to the time stud,, inter0iews with
the /rocess owners can /ro0ide 0alua+le insight into the e"isting /rocess Low.
At times, with certain wor( en0ironments, these Jtime studiesK can +e
0iewed in a negati0e light, and /artici/ation +, the sho/ Loor can +e diUcult
to o+tain. It should +e e"/lained that these o+ser0ations are +eing used to
tr, to understand the current /rocess and are not +eing used to set /a, rate.
If there is still o//osition, then tr, to reach a consensus utiliIing the e"isting
wor( element standards. In man, cases, there is so much im/ro0ement
o//ortunit, a0aila+le without +eing concerned with changes to the actual
wor( content of the /rocess that this is not an issue.
A second a//roach would +e to ca/ture data from the e"isting M!P II
s,stem. This a//roach is /ro+a+l, more acce/ta+le when tr,ing to address a
large /o/ulation of /arts in a short /eriod of time and information accurac,
of =;W is not required. If, howe0er, the root cause of a /ro+lem is critical or
an accurate stor, is required, then it is recommended that the anal,sis +e
/erformed on data collected directl, from the sho/ Loor. This wa, the engineer
can not onl, formall, record what is seen +ut also record informall,
what is heard through con0ersations with sho/Loor /ersonnel.
At this /oint, the wor( content of the /roducts has +een recorded and
some insight into the /roduct /rocess Low has +een documented. &ow it is
time to understand the relationshi/ +etween the two. $, reLecting the /roduct
and /rocess Low in a 0olume matri" C-igure ?.=D, decisions a+out the
cell design +egin to e0ol0e. The 0olume matri" reLects demand and /rocess
Low data in /roduction units and minutes/hours. The /lacement of /roduct
grou/s on a matri" allows for the calculation of total 0olume +, units and
hours for each /roduct and each /rocess. *e/ending on the manufacturing
/rocess, the /roduction rate could +e calculated in da,s or wee(s. The hours
should reLect three maFor categoriesB man time, machine time, and setu/
time Cthe setu/ time +eing assumed at once /er da,D. Hne of the o+Fecti0es
of a lean manufacturer is to +e Le"i+le and res/onsi0eM therefore, the goal is
to ma(e toda, what is sold toda,. This cannot +e accom/lished if changeo0ers
are e"ecuted once /er month.
Again referring to ostanIaPs
The :"ant"! Lea)+ 8n S)ee& to Market,
the
author descri+es a similar /rocess of searching for commonalit,B J.ach /roduct
is re0iewed to identif, the /articular /rocesses or machine o/erations
required to manufacture each /roduct. The ne"t ste/ in cell design is to create
>@
a cell con2guration that is made u/ of the common machines or o/erations
identi2ed in the /rocess ma/.K
;
There are two /rimar, outcomes of the routing anal,sis e"erciseB C7D the
segregation of high: and low:0olume /roducts +ased on a reLecti0e 0iew of
the manufacturing /rocess, and C3D an understanding of the degree of 0ariation
in /roduct 0olume/mi" and wor( content as it relates to cell design. It
is through an understanding of these two as/ects that cell design decisions
can +e made relati0e to the use ofB
7. Scheduling methodolog, E com/le" mi" 0s. segregated /roduction
3. !ate:+ased, Nan+an, ma(e:to:order /roducts
5. Nan+an +u1ers for line im+alances and long setu/ times
6. .qui/ment wor(loads
;. .qui/ment needs
?. StaUng needs
<. Shift hour requirements
"akt "ime
The word
takt
comes from the 9erman word for rh,thm or +eat. Ta(t time is
the +asis for cell design and re/resents the rate of consum/tion +, the
mar(et/lace
C-igure ?.74D. Ta(t time is where the e1ort starts, +ecause it is reLecti0e
of the customer demand. .0er,thing in cell design is +ased on ta(t time. Ta(t
time is often confused with c,cle time. The two are calculated from com/letel,
di1erent /ers/ecti0es. ,cle time re/resents the current ca/acit,/ca/a+ilit, of
the e"isting o/eration, whereas ta(t time is +ased on /roFected customer
demand, not the a+ilit, of the current /rocess to /erform. The ratio for ta(t
time has scheduled /roduction time a0aila+le as the numerator and designed
;igure >/@ +olume Matrix
Product
SNU C#ol.D
H56=?< C57D
-56<@? C3@D
H56=@< C35D
U@=<;? C74D
S/U M S/U M& S/U S/U M& M S/U
57.4
<4.4
35.4
;.4
73=
57.4
<4.4
35.4
3;.4
76=
3;.4
34.4
34.4
3;.4
=4
=;.3
=;.3
=;.3
=;.3
7;.4
7;.4
6?.;
76.4
77.;
<.4
<=
6?.;
76.4
56.;
7;.4
774
7;.4
5;.4
34.4
7;.4
@;
73@
73@
73@
73@
74
74
<<.;
54@.4
56.;
73.4
653
<<.;
54@.4
;<.;
64.4
6@5
64.4
@4.4
64.4
64.4
344
M
Total CMin.D
M&M& M M&M
6A
dail, /roduction rate as the denominator. -or instance, scheduled time a0aila+le
would +e nothing more than a regular @:hour shift minus time for scheduled
lunches, +rea(s, meetings, etc. This results in the scheduled time a0aila+le.
-or e"am/le, an @:hour shift [ C54 minutes for lunch \ 54 minutes for two
7;:minute +rea(sD ] < hours of shift time a0aila+le.
The factors that go into de0elo/ing the designed dail, /roduction rate
include the +usiness /lan sales forecast and a 0ariation coeUcient to co0er
customer demand mi"/0olume 0ariation. The com+ination of these factors
result in a designed dail, /roduction rate for the cell. -or e"am/le, a forecast
demand might +e
Monda, Tuesda, )ednesda, Thursda, -rida,
UnitsB 344 3@4 3?; 37; 36;
In order to accommodate the 0olume 0ariation and design a le0el /roduction
schedule, the cell:designed dail, /roduction rate would +e at 3=4 units /er
da,. This would +e +ased on re0iewing the demand 0ariation from da, to
da, or wee( to wee(, determining the a0erage demand for the ne"t ? to 73
months, and increasing the demand le0el to accommodate Luctuation +, a
coeUcient. In this case, the a0erage demand is 367 units /lus a 34W coeUcient,
or a dail, demand of 3=4 units Csee +elowD. The /ercentage is su+Fecti0e,
+ased on the amount of 0ariationM howe0er, it is not recommended to e"ceed
;4W of the a0erage +ecause a cell cannot +e designed for in2nite ca/acit,.
344 units \ 3@4 units \ 3?; units \ 37; units \ 36; units ] 734; units
734; ^ ; ] a0erage of 367 units /er da,
#ariation coeUcient ] C3@4 [ 367D ^ 367 ] 7<W Crounded to 34WD
C367
7.34D ] 3=4 units designed dail, /roduction rate

The ta(t time for the e"am/le a+o0e would +e 7.; minutes. The time a0aila+le
in minutes is < hours
?4 minutes, or 634 minutes. *i0iding 634 minutes

+, 3=4 units gi0es 7.; minutes, which is the ta(t time for that cell. To determine
ta(t time when there are multi/le /roducts running in the same cell,
it is necessar, to calculate the demand of all /roducts for that cell. It is then
;igure >/7A 4e)nition of "akt
Ta(t time CTTD Total time a0aila+le /er da,
*esigned dail, /roduction rate
] ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
67
a matter of ta(ing the designed dail, /roduction rate for each of the indi0idual
/roducts, adding them together, and using the total demand for all
the /roducts as the designed dail, /roduction rate for the cell and di0iding
that into the schedule time a0aila+le. This results in one ta(t time for the
cell, which encom/asses the demand of all /roducts for that cell.
*orkload Balancing and ne3Piece ;lo-
Hnce a cell ta(t time has +een determined, it is now a matter of com/aring
se0eral as/ects of the /rocess and the ta(t time in order to design a +alanced
cell. The o/erational elements Cmachine time, man time, and setu/ timeD of
each /roduct are e"amined with relation to ta(t time. Machine time is com/ared
to ta(t time in order to determine if the 2"ed c,cle time of an, /iece
of equi/ment is greater than the ta(t time. If this is so, action must +e ta(en
to change the a0aila+le time, o1 load, reduce the c,cle time, change /rocesses,
add equi/ment, s/lit demand, etc. If the o/eration remains greater than ta(t
time, it will need to +e +alanced with in:/rocess Nan+an in0entor, and/or
additional shifts.
Man time is com/ared to ta(t time to address two o//ortunitiesB C7D
autonomation and C3D wor(load +alance. The 2rst o//ortunit,, autonomation,
means equi/ment does not need to +e watched in case something goes
wrong. Autonomation equi/ment will automaticall, shut o1 when an a+normalit,
is disco0ered, there+, allowing the o/erator to do other 0alue:added
wor(. This o//ortunit, is in0alua+le for increasing /roducti0it, and qualit,.
The second o//ortunit,, wor(load +alancing, has to do with e"amining the
indi0idual wor( elements of each o/eration and determining if the, can +e
reduced, shifted, resequenced, com+ined, or eliminated. This e1ort to +alance
the wor(load to ta(t time is a main ena+ler for achie0ing one:/iece Low
and minimiIing manufacturing lead:times.
Setu/ times are almost alwa,s greater than ta(t time and need to +e
addressed as /art of the cell design /rocess. $, com/aring setu/ time to ta(t
time, one has a greater a//reciation as to how far setu/s need to im/ro0e in
order to create a Le"i+le wor( en0ironment. The initial sta(e in the ground
is to /lan on setting u/ each high:0olume /roduct e0er, da, and then to
schedule the /roduct mi" to run accordingl,. If this cannot +e accom/lished,
then /lan to run 3 to 5 da,sP worth at a time and hold the e"cess in0entor,
until the customer or customer cell as(s for it Cne0er allow this to e"tend
/ast more than a one wee(Ps runD. It will +ecome 0er, clear, 0er, quic(l,,
wh, setu/ reduction is so im/ortant, when the su//lier cell has to /h,sicall,
6:
hold the e"cess in0entor, until the customer cell as(s for it through a Nan+an.
Hnce each of these three o/erational elements is determined for each /roduct,
the, are com/ared to the o0erall ta(t time of the cell. This information is
/laced on a loading chart for each indi0idual /roduct SNU C-igure ?.77D.
-rom this /oint, it is a matter of generating ideas and loo(ing for cell
design solutions that will +alance the cell wor(load for all /arts and ta(t time.
$, re0iewing the actual wor( elements and either im/ro0ing the o/erations
or shifting the wor( content, the cell can +ecome more +alanced com/ared
to the ta(t. This is accom/lished much more easil, in an assem+l, en0ironment
than in a fa+rication en0ironment, +ut it can +e done in +oth.
)hen the o/erations are +alanced to ta(t time, it is /ossi+le to ta(e ad0antage
of a one:/iece Low a//roach to wor(Low instead of running in large
+atch quantities. )ith one:/iece Low, the manufacturing lead:time, le0el of
in0entor,, and feed+ac( on qualit, issues are far su/erior to that of a +atchand:
queue s,stem. In a +atch:and:queue s,stem, indi0idual /ieces are com/leted
at an o/eration and sit waiting in queue until the entire +atch is
com/lete, at which /oint the, are mo0ed to the ne"t o/eration in sequence
and wait in queue for other orders to +e com/leted that arri0ed there 2rst
+efore mo0ing forward. In the one:/iece Low a//roach, /roducts are /assed
one /iece at a time from o/eration to o/eration with a 2rst:in/2rst:out C-I-HD
/riorit,. Product manufacturing lead:times are now onl, as long as the total
of all the ta(ts the, had to get through. -or e"am/le, 20e o/erations each with
a ta(t of 7.4 minute require a manufacturing lead:time of 20e minutes.
Another signi2cant +ene2t to one:/iece Low is the im/act on qualit,. There
;igure >/77 'oading &$art
6<
are fewer units in Low to rewor( or scra/M if there is a defect found, the
feed+ac( is almost instantaneous and correcti0e action is ta(en on the s/ot,
not se0eral wee(s later.
Hnce we (now the c,cle time for the /rocess and we (now the designed
ta(t time, we can ta(e the (nown c,cle time and di0ide it +, the ta(t time
to determine the ma"imum staUng requirements for the cell. -or instance,
the c,cle time from the e"am/le a+o0e was ;.4 minutes. If ta(t time for that
/rocess were 3.; minutes, then the required staUng would +e two o/erators.
Actual head counts will 0ar, with changes in required dail, demand, which
is wh, cross:training and o/erator Le"i+ilit, are so im/ortant in su//orting
one:/iece Low.
&ell 4esign &riteria
)hen it comes to designing a cell, there should +e esta+lished a set of s/eci2c
design o+Fecti0es or criteria to +e achie0ed. These criteria are to +e the guiding
focus for good cell design. The following is a list of general criteria to consider
as /art of a good cell designB
7. $e sure that material Lows in one direction.
3. !educe material and o/erator mo0ement.
5. .liminate storage +etween o/erations.
6. .liminate dou+le and tri/le handling.
;. Locate /arts as close as /ossi+le to /oint of use.
?. UtiliIe tas( 0ariation to reduce re/etiti0e motion.
<. Locate all tools and /arts within eas, reach.
@. .nsure short wal(ing distances.
=. .liminate all wait time.
74. Nee/ in mind that 0ertical storage requires less s/ace than horiIontal
storage Cinclude Nan+an materialD.
77. La, out machines and tools +, /rocess sequence.
73. In0ol0e o/erators in the design /rocess Cincor/orate economies of
motionD.
&ell 'ayout
The cell la,out is a gra/hical re/resentation of the o/erator Low and material
Low C-igure ?.73D. It de/icts the /ath of the o0erall material mo0ement
through the cell and descri+es the designed o/erator sequence and o/erations.
6=
It shows the staUng le0els, ta(t time, c,cle time, designed in:/rocess stoc(
le0els, and qualit, and safet, chec(s required +, the cell. The cell wor( la,out
chart can then +e su//orted at a more detailed le0el with gra/hical wor(
instructions for each o/eration Csee ha/ter <D. The cell wor( la,out is /rimaril,
for training new o/erators, communicating standard wor( to management,
and dri0ing continuous im/ro0ement initiati0es.
Ban2an Si!ing
It is at this /oint in the cell design /rocess that the control of wor(Low through
Nan+an is determined. The num+er of Nan+ans and quantit, can +e determined
in a multitude of di1erent wa,s. There are se0eral di1erent formulas
that can +e utiliIed and which are identi2ed in most o/erational management
te"t+oo(s. There are /rimaril, rules of thum+ relati0e to the num+er of da,s
or wee(s of in0entor, located on the sho/ Loor, and there are simulation
model calculations +ased on the amount of wor( in /rocess +uilt u/ in wor(
queues due to /rocess 0aria+ilit,. The method of calculation is not that
im/ortantM
Fust /ic( one and use it. Most Nan+an s,stem im/lementations fail
;igure >/7: &ell 'ayout
65
+ecause of lac( of disci/line or lac( of training, not +ecause someone used
the wrong calculation. That ha0ing +een said, a sim/le formula has +een
included in this section as a /oint of reference as to how Nan+ans could Low
+etween a customer cell and a su//lier cell.
5anban *or!"la+
Ste/ 7.
Ste/ 3.
/ote+
Lot siIe ma, +e required due to weight, siIe, A,$, categoriIation,
setu/ times, common resources, outside su//liers, etc. !e/lenishment time
that is less than one shift would result in a two:+in s,stem. !e/lenishment
time that is greater than one shift would result in a card s,stem Csee -igure
?.75D. -or e"am/leB
;igure >/7< Ban2an System
Ban2an perational Rules &ontinued:
=/ By t$e time t$e replenis$ment parts arri(e# all
parts s$ould $a(e 2een consumed 2y t$e customer
cell/ If not# t$e remaining parts s$ould 2e placed on
t$e )rst incoming part container F;I;G/
5/ Replenis$ment time -indo-s must 2e ad$ered to
2y t$e supplier cell Fe/g/# : $ours# 7 s$ift# < daysG/
Ban2an perational Rules:
7/ As a part container is opened at t$e customer
cell# a Ban2an card is returned to t$e supplier cell/
:/ *$en t$ree cards are recei(ed 2y t$e supplier
cell# one day's worth of parts are produced/ "$is
is to accommodate long c$angeo(ers/
</ *$en t$e fourt$ card is recei(ed# one day's
worth of parts are s$ipped/
*esigned dail, /roduction rate re/lenishment time ChoursD
a0aila+le time
:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
:::::::::::::: ] Nan+an quantit,
Nan+an quantit,
lot siIe
::::::::::::::::::::::::::::::::::::::: ] Z of cards
6>
Ste/ 7.
JAK /arts ] 7/3 da, demand, or 6; /ieces
Ste/ 3.
7@4 /ieces ^ 6; /ieces ] 6 cards
.0er, Nan+an should ha0e the minimum identi2cation requirementsB
7. Part num+er
3. Part descri/tion
5. Part quantit,
6. Point of su//l,
;. Point of consum/tion
?. JHne ofX cardsK Ce.g., 7 of 5M 3 of 5M 5 of 5D
The o0erall a//roach to determining Nan+an siIes and the im/act on
in0entor, would includeB
7. 9athering the data required for each /art num+er in the cell
3. UtiliIing the Nan+an calculation to determine the Nan+ans in Low
5. *etermining the target in0entor, le0el +ased on the Nan+an quantit,
6. alculating the designed num+er of in0entor, turns
The determination of Nan+ans is an im/ortant ste/ in the cell design
/rocess +ecause Nan+ans are the limiting factor for in0entor, le0els Craw
material, wor( in /rocess, 2nished goodsD and are the control element on
lead:times. These o/erational as/ects Cin0entor, and lead:timeD ha0e a maFor
inLuence on continuous im/ro0ement within a cellular o/eration.
In his +oo(,
The ;"st68n6Ti!e Breakthro"gh+ 8!)le!enting the /ew Man"*act"ring
Basics
, Ha, descri+ed a test for determining if a cell is trul, a Fustin:
time wor( cellB JThe 2rst test is whether the /roduct is Lowing one at a
time. XThe second test to see if a machine cell is trul, a GIT cell is whether
the machine cell has the Le"i+ilit, to +e o/erated at di1erent out/ut rates
and with di1erent crew siIes.K
<
Although I would agree that these two as/ects
should +e e0ident in order to ha0e a cell, I would ho/e we ha0e a greater
a//reciation for Fust how man, other as/ects are necessar, in order to ha0e
a trul, successful lean manufacturing cell.
=4 /ieces 7; hours
<.; hours
::::::::::::::::::::::::::::::::::::::::::::::::: ] 7@4 /ieces
66
&ow that the ste/s for cell design ha0e +een identi2ed and we ha0e greater
insight into the im/act of material Low through the factor,, it is time to
address those as/ects which la, at the foundation of continuous im/ro0ement
and /ro0ide sta+ilit, to the cell E namel,, the Process ontrol element.
6@
6
Process &ontrol
Element
rocess ontrol focuses on sta+iliIing the /rocess, institutionaliIing the
change, and dri0ing continuous im/ro0ement acti0ities. The /roduction
/rocesses of man, manufacturing o/erations are not in control
nor are the, /erforming at the le0els necessar, to su//ort a lean en0ironmentM
therefore, there is a need to address these areas as /art of the im/lementation.
After a change has +een made to a /rocess, it +ecomes necessar, to Jloc( it
downK and maintain it as the new standard for o/eratingM howe0er, after
ha0ing set the new standard, the /erformance le0el should not +e limited to
that standard, so continuous im/ro0ement tools are used to esta+lish a new
le0el of /erformance. A good management /ractice to consider im/lementing
would +e that of e"/ecting standards to im/ro0e twice /er ,ear. According
to Shingo, in
A St"&y o* the Toyota Pro&"ction Syste!
, To,ota is e"tremel,
rigid in regard to its standards and e"/ects continuous im/ro0ementB JThe
To,ota /roduction s,stem demands that all wor( +e /erformed within standard
times, and sho/ su/er0isors are charged with holding wor(ers to those
standards. XSho/ su/er0isors are encouraged to feel em+arrassed when the
same standard o/erating charts are used for a long time +ecause im/ro0ements
in the sho/ o/erations should +e made continuousl,.K
7=
This cha/ter
deals with man, of the institutionaliIation as/ects of lean manufacturing
and descri+es methods that can +e utiliIed to foster the continuous im/ro0ement
as/ects of a lean manufacturing en0ironment.
This last /rimar, element, Process ontrol, focuses on a num+er of lean
manufacturing as/ects that sta+iliIe the standard methods of wor(ing and
then continuall, /ursues the setting of new standards for those methods.
P
?A
This element +rings to light se0eral acti0ities that la, the foundation necessar,
for a com/an, to reach world:class le0els of /erformance, and it is the /ursuit
of these acti0ities that sets the wheels of continuous im/ro0ement in motion,
there+, de0elo/ing /rocesses that are more ro+ust, relia+le, and /redicta+le.
This cha/ter highlights si" im/ortant acti0ities relati0e to Process ontrolB
7. Single:minute e"change of dies CSM.*D
3. Total /roducti0e maintenance CTPMD
5. Po(a:,o(e Cfail safeD
6. ;S Chouse(ee/ingD
;. #isual controls
?. 9ra/hic wor( instructions
.0en though these do not address all as/ects of the Process ontrol element,
the, do /ro0ide enough insight for an organiIation to initiate action on some
of the more critical areas.
Single3Minute Exc$ange of 4ies
The im/lementation of setu/ reduction is a cornerstone for an, lean
manufacturing
/rogram. The de/endenc, on Le"i+ilit, Ces/eciall, in fa+ricationD
is /aramount to allowing le0el /roduction schedules to Low. -ollowing are
+ene2ts of the single:minute e"change of dies CSM.*DB
7. .qui/ment changeo0er time measured in increments of less than 74
minutes
3. Minimal loss to through/ut time on equi/ment
5. The a+ilit, to run a greater 0ariet, of /roduct mi" across a gi0en
resource
6. $uilding toda, onl, what is needed toda,
The SM.* /rocess is not focused on the reduction of total time s/ent
doing setu/s, +ut rather on the /ursuit of conducting more setu/s in the
same amount of time. $, cutting changeo0er time in half, a cell can now
conduct twice as man, setu/s in the same amount of time. $, cutting them
in half again, a cell can now conduct four times as man, setu/s in the same
amount of time. The /rimar, o+Fecti0e is to +uild Le"i+ilit, into the /rocess.
Shigeo Shingo de0elo/ed SM.* as a manufacturing consultant to Ga/anese
com/anies during the /ost:)orld )ar II era. It too( se0eral ,ears for
Process Control le!ent
?7
him to /erfect the /rocess of setu/ reduction and design it as a structured
set of ste/s used to deli0er incredi+le ca/a+ilit, to organiIations that ta(e
ad0antage of this com/etiti0e wea/on. The /rocess is not terri+l, diUcult,
and as much as <;W of the +attle has to do with a /ositi0e attitude. As Shingo
states in
The Sayings o* Shigeo Shingo+ 5ey Strategies *or Plant 8!)rove!ent
B
JItPs the easiest thing in the world to argue logicall, that something is
im/ossi+le.
Much more diUcult is to as( how something might +e accom/lished,
to transcend its diUculties, and to imagine how it might +e made /ossi+le.K
33
The /rocess has three +asic ste/sB C7D segregate the acti0ities, C3D recategoriIe,
and C5D reduce or eliminate ste/s as the, are done toda,. In ste/
one, identif, all the acti0ities in the /rocess. T,/icall,, most com/anies do
not reall, (now what their la+or force has to go through in order to ma(e a
setu/. It is not uncommon for an o/erator to ha0e to tra0el half a mile C3;44
feetD in order to accom/lish all the tas(s necessar, to ma(e a setu/. *onPt
Fust ta(e m, word for it. )al( the entire /rocess sometime. 'ou will +e
sur/rised at what ,ou learn. Hnce all the ste/s ha0e +een documented for
the setu/ /rocess, the, need to +e segregated into two categories. The 2rst
categor, is that of internal setu/ E those items that ha0e to +e done while
the machine is down. The second categor, is that of e"ternal setu/ E those
items that can +e done while the machine is running C-igure <.7D.
)hen the acti0ities ha0e +een identi2ed and segregated, the ne"t ste/ is
to re:categoriIe or shift as man, acti0ities as /ossi+le from internal to
e"ternal. T,/icall,, +etween shifting acti0ities from +eing internal to e"ternal
;igure 6/7 Identify Internal (s/ External Setup
% !etrie0e and stage /arts, tools for ne"t lot
% Pre:heat, /re:measure, /re:locate
% #erif, tool functionalit,
% lean and store tools
% Mo0e /arts to ne"t o/eration
?:
and conducting some good house(ee/ing /ractices, changeo0er time can +e
reduced +, ;4W.
Hnce setu/ acti0ities ha0e +een documented and re:categoriIed, the last
ste/ is to loo( at sim/lif,ing the setu/ /rocess for +oth internal and e"ternal
acti0ities. In0estigate standardiIing the setu/, minimiIing the utiliIation of
+olts and adFustments, and utiliIing sim/le one:turn t,/es of attachment
methodologies and such techniques as cams, interloc(ing mechanisms, slotted
+olts, secured washers, etc. Stri0e to ma(e the setu/ /rocess standard,
consistent, re/eata+le, and one that em/lo,ees can learn. Too often statements
are made a+out a /articular setu/ /rocess +eing too highl, s(illed or
too +lac( art or requiring too man, ,ears of e"/erience. All of these issues
need to +e designed out of the setu/ /rocess. Gust as Shingo stated in
A
Revol"tion in Man"*act"ring+ The SM1 Syste!
B JIt is generall, and erroneousl,
+elie0ed that the most e1ecti0e /olicies for dealing with setu/s address
the /ro+lem in terms of s(ill. Although man, com/anies ha0e setu/ /olicies
designed to raise the s(ill le0el of wor(ers, few ha0e im/lemented strategies
that lower the s(ill le0el required +, the setu/ itself.K
7@
-ollowing the three
+asic ste/s, utiliIing the techniques mentioned, and ha0ing an o/en mind
a+out the /ossi+ilities are all (e, ingredients to ma(ing a SM.* /rogram
Lourish.
"otal Producti(e Maintenance
A second cornerstone in su//ort of a lean manufacturing en0ironment is
that of total /roducti0e maintenance CTPMD. .qui/ment is integral to an,
manufacturing en0ironment, and the relia+ilit, of equi/ment in a lean
en0ironment
is /aramount to a trul, successful im/lementation. As in0entor,
le0els are reduced, the u/time on machiner, +ecomes e0en more im/ortant.
$ecause there is little in0entor, to +u1er un/lanned downtime in a lean
en0ironment, when a machine goes down the entire /roduction line goes
downM therefore, a formal TPM /rogram is instrumental in su//orting a lean
manufacturing im/lementation.
There are three main as/ects of a TPM /rogramB /re0entati0e maintenance,
correcti0e maintenance, and maintenance /re0ention. .ach one of
these com/onents has a di1erent mission and required outcome as /art of
the TPM /rogram. .ach has a signi2cant role to /la, and is necessar, for
world:class /erformance to +e sustained.
The 2rst, /re0entati0e maintenance, focuses on /re0enting +rea(downs
from ha//ening and is +, far the most recogniIed acti0it, relati0e to TPM.
?<
Pre0entati0e maintenance is concerned with the u/time or a0aila+ilit, of
equi/ment. The e1ort here is aimed at /erforming /re0entati0e maintenance
actions on equi/ment in a /re/lanned/scheduled manner, as o//osed to in
an un/lanned or chaotic manner. Also, the inclusion of o/erators in this
/rogram, s/eci2call, to conduct dail, maintenance on the equi/ment and
identif, a+normalities as the, occur, is /aramount to successful /re0entati0e
maintenance. $, doing this, the through/ut and a0aila+le ca/acit, on equi/ment
are signi2cantl, im/ro0ed.
orrecti0e maintenance concentrates on im/ro0ing re/aired equi/ment.
The idea here is that if com/onents from the original equi/ment (ee/ +rea(ing,
wh, not re/lace them with something +etterR -i"ing them with an
im/ro0ed com/onent results in longer equi/ment life and more u/time from
the equi/ment.
Maintenance /re0ention is an area that most com/anies neglect and /a,
0er, little attention to when designing or /urchasing new equi/ment. $ecause
one of the (e, ingredients of a successful TPM /rogram is that of dail,
o/erator Jautonomous maintenance,K it is im/erati0e that equi/ment +e eas,
to maintain on a recurring +asis. If the new machiner, is diUcult to lu+ricate,
if +olts are diUcult to tighten, and if it is im/ossi+le to chec( critical Luid
le0els, then it is 0er, unli(el, that o/erators will +e moti0ated to monitor
equi/ment on a dail, +asis. The total life:c,cle costs on equi/ment must +e
e"amined when /rocuring new machines, not Fust the one:o1, nonrecurring
costs.
In su//ort of TPM as /art of a lean manufacturing im/lementation, the
information relati0e to downtime on equi/ment is im/ortant. Most of the
time, if an, information is collected at all, it is when equi/ment has crashed
and the cause for the downtime condition is documented. .0en though this
is good, it /ro0ides onl, a /artial /icture as to the true through/ut loss on
equi/ment. There are in actualit, si" main reasons, with associated causes,
for through/ut losses on machiner, C-igure <.3D. Shirose identi2ed these
losses in his +oo(,
TPM *or $orksho) Lea&ers
, and declared them to +e
negati0e o+stacles to eUcienc,B JThere are two wa,s to im/ro0e equi/ment
eUcienc,B a /ositi0e wa, and a negati0e wa,. XThe negati0e was is +,
eliminating
the o+stacles to eUcienc, E o+stacles that in TPM are called the si"
+ig losses.K
35
.ach of these losses has an im/act on the through/ut and /lanned ca/acit,
of equi/ment. T,/icall, +rea(down is reall, the onl, loss for which we
ca/ture information, although all si" lead to a reduction in /roducti0it,.
$rea(down and setu/ Cchangeo0erD ha0e an im/act on machiner, a0aila+ilit,.
Minor sto//age and reduced s/eed ha0e a direct inLuence on the /roducti0it,
?=
of equi/ment when it is running. Sualit, and startu/ ,ield certainl, ha0e an
e1ect on a com/an,Ps a+ilit, to /roduce, /articularl, when a /ortion of
0alua+le ca/acit, is s/ent on /roducing /oor:qualit, /roduct.
A technique used to (ee/ the si" +ig losses in chec( is that of o0erall
equi/ment e1ecti0eness CH..D, which is measured as a /ercentage and utiliIes
information from un/lanned downtime, machine c,cle time, and /rocess
,ield to determine which of the si" +ig losses are ha0ing the greatest
im/act, there+, /ro0iding insight as to where to focus im/ro0ement e1orts.
An a//reciation of these si" +ig losses and how to reduce their e1ect on
equi/ment resources within the /lant will go a long wa, toward su//orting
a lean manufacturing /rogram.
Poka3Yoke F;ail SafeG
Human +eings will in0aria+l, ma(e mista(es. It is not /ossi+le to remem+er
e0er,thing that has to +e done at e0er, ste/ of /roducing e0er, /roduct with
e0er, Fo+. Peo/le will ma(e errorsM it ha//ensM howe0er, errors are the not
same as defects. A defect is what ta(es /lace after an error occurs. $, sorting
good /roduct from defecti0e /roduct at the end of the /rocess, a com/an,
cannot ho/e to achie0e a defect:free en0ironment. If, howe0er, errors are
caught +efore the, lead to defects, then a defect:free en0ironment +ecomes
/ossi+le. This is where the /ower of Po(a:,o(e comes into /la,.
Po(a:,o(e, another as/ect de0elo/ed +, Shingo after )orld )ar II, in
conFunction with source ins/ection, was designed to focus on the /ursuit of
qualit, at the source and ca/turing feed+ac( on defects as close as /ossi+le
to the root cause. In
<ero :"ality Control+ So"rces 8ns)ection an& the Poka6
4oke Syste!
, he statesB JA Po(a:,o(e s,stem /ossesses two functionsB it can
carr, out 744 /ercent ins/ections and, if a+normalities occur, it can carr,
out immediate feed+ac( and action.K
37
;igure 6/: "otal Producti(e Maintenance: Six Big 'osses
Breakdown: ;ailed function and reduced function
Setup and adjustment: Imprecise and nonstandard measurement
Idling and minor stoppage: sudden disruptions
Reduced speed: actual (s/ designed
Quality defects and rework: sporadic and c$ronic
Startup yield: process insta2ility
?5
Po(a:,o(e, or mista(e /roo2ng, is accom/lished through the de/lo,ment
of sim/le, ine"/ensi0e de0ises designed to catch errors so the, do not +ecome
defects. These de0ices are /laced in the /rocess to ensure that it is 0er, eas,
for the o/erator to do the Fo+ correctl, or 0er, diUcult for the o/erator to
do the Fo+ incorrectl,. The tools could +e /h,sical, mechanical, or electrical
C-igure <.5D.
A Po(a:,o(e could +e as sim/le as a chec(list for the o/erator or technician
to ensure that all ste/s in the /rocess are co0ered, much in the same
manner as /ilots going through a /re:Light chec(list +efore ta(ing o1. The
intent of the Po(a:,o(e is to sto/ defects at the source, to /ro0ide immediate
feed+ac( as to the cause, and to /re0ent the /assing on of defecti0e /roducts
to the ne"t customer in the /rocess.
5S F,ousekeepingG
.0er,thing has a /lace and e0er,thing in its /laceY If it does not warrant a
la+el, it does not warrant a /lace in the areaY These are words to li0e +, in a
lean manufacturing en0ironment. So, what is so im/ortant a+out house(ee/ingR
According to authors Henderson and Larco C
Lean Trans*or!ation+ (ow
To Change 4o"r B"siness into a Lean nter)rise
D, it is 0er, im/ortantB JMost
/eo/le underestimate the im/ortance of safet,, order, and cleanliness in the
wor(/lace. Hur former colleagues at To,ota and Honda will tell ,ou that 3;
to 54W of all qualit, defects are directl, related to this issue.K
=
;igure 6/< Examples of Error3Proof 4e(ices
?>
)hat is this thing called ;S C-igure <.6DR -or all /ractical /ur/oses, it
re/resents sim/le, sound, structured, s,nchronous, ser0icea+le house(ee/ing.
&o, that is not what ;S stands forM rather, the words are all Ga/anese,
coined +, To,otaB
7.
Seiri
CsiftingD
3.
Seiton
CsortingD
5.
Seiso
Cswee/ingD
6.
Seikets"
CstandardiIeD
;.
Shits"ke
CsustainD
The 2rst,
Seiri
, has to do with clearing the area of those items that are
not +eing used on a regular +asis Ce.g., the ne"t 54 da,sD. It is a matter of
sifting through and se/arating the clutter from the items that are needed to
ma(e it easier to wor(, easier for material to Low, and easier for o/erators
to mo0e, in addition to im/ro0ing utiliIation of s/ace.
Seiton
deals with identif,ing and arranging items that +elong in the area.
These items should all +e sorted and la+eled as +elonging in that area. If the
item is not im/ortant enough for a la+el, then it is not im/ortant enough to
sta, in the area. This ma(es recognition of the /ro/er tooling, resources,
materials, etc. e"tremel, 0isi+le.
;igure 6/= 5S F,ousekeepingG
J Arrange and identify all items in t$e cell Fno loose toolsG
J 'a2el locations for e%uipment# tools# and materials
J &lean up daily Fno grit or grimeG
J Be a2le to (isually identify any a2normalities
J .tili!e $ousekeeping audit c$ecklist
Screwdri0er Hammer )rench
?6
Seiso
has to do with maintaining order +, swee/ing and /ic(ing u/ on a
regular +asis Ce.g., dail,, +i:wee(l,D. A /roduction area should +e neat and
clean at the end of e0er, shift. There should +e nothing missing or out of
/lace. All tools and materials should +e accounted for. A well:maintained
area should +e a+le to accom/lish this using less than 3W C74 minutesD of
the dail, scheduled shift time.
Seikets"
is concerned with management disci/line to enforce the standard
acti0it,. If the house(ee/ing acti0it, does not +ecome institutionaliIed within
the o/eration, the area will not sta, clean and em/lo,ees will re0ert +ac( to
the old wa,s 0er, quic(l,. A regular, formal audit with quantitati0e and
qualitati0e e"/ectations should +e conducted and scores /osted for areas of
res/onsi+ilit,. Assigned areas of the Loor are im/ortant, +ecause if e0er,+od,
has res/onsi+ilit,, then no+od, has res/onsi+ilit,.
Shits"ke
is managementPs res/onsi+ilit, to reinforce the im/ortance of
house(ee/ing and to demonstrate leadershi/ +, follow:through and wal(ing
the tal(. Peo/le will /a, attention more to what management does than what
the, sa,. Proclaim that house(ee/ing is im/ortant, clarif, e"/ectations, wal(
the sho/ Loor, reward those who are /erforming, and constructi0el, disci/line
those who are not.
+isual &ontrols
The area of 0isual controls encom/asses such conce/ts as line:of:site
management,
or the a+ilit, to wal( onto the sho/ Loor and in a matter of minutes
(now the status of the o/eration, what might +e a+normal, how the material
is Lowing, what Fo+ is in wor( and what Fo+ is ne"t to go in wor(. It also
includes the conce/t of signage, which means that e0er,thing is dis/la,ed,
mar(ed, documented, and re/orted, so much so that an, indi0idual o1 the
street could wal( into the factor, and gi0e a /lant tour.
A (e, as/ect of 0isual control is that of sho/Loor /erformance measurement,
accom/lished through the dis/la, of a handful of measures Cthree to
20eD on the sho/ Loor for e0er,one to see and understand. As was stated in
ha/ter 6, these are to +e measures that are created, owned, monitored,
controlled, and understood +, those in the area. If a measure is created in
another area, then +rought to the sho/ Loor and /osted in another area, it
is 0er, unli(el, that /eo/le wor(ing in that area will reall, (now what it
means. )orse ,et, the, could not e"/lain how their Fo+ /erformance relates
to that measurement. It is im/ortant for indi0iduals to understand whether
their areas are /erforming to /lan, it is im/ortant for them to record how
??
the, are doing according to that /lan, it is im/ortant for them to ta(e
res/onsi+ilit, for that /erformance, and it is im/erati0e that the, (now how
to im/ro0e that /erformance. In addition, the, need a wa, to highlight
/ro+lems in order to recei0e /rom/t su//ort and correcti0e action.
The utiliIation of a 0isual control +oard or communication +oard C-igure
<.;D will /ro0ide the means to dis/la, /erformance status and communicate
/ro+lems. T,/icall,, the communication +oard is di0ided into two hal0es.
Hne half contains the sho/Loor measures of /erformance Ce.g., schedule
adherence, qualit,, c,cle time, etc.D. The other half contains a /ro+lem section,
where the o/erators can document /ro+lems the, are ha0ing. These
/ro+lems are re0iewed on a dail, +asis, actions assigned, resolution dates
committed, and mitigating actions recorded. This /ro0ides 0isi+ilit, to sho/Loor
/ro+lems that are otherwise hidden or /laced on a list to +e resol0ed
someda,. The im/ortance of 0isual controls is how the, ma(e im/ro0ement
acti0ities, issues, /erformance status, /ro+lems, and o/erational rules 0isi+le.
Grap$ic *ork Instructions
To consistentl, con0e, how a Fo+ is to +e /erformed according to documented
standard wor( sheets, the message needs to +e communicated in an easil,
recogniIa+le format. Te"t:+ased wor( instructions are /ro+a+l, the least
attracti0e means of accom/lishing this tas( and ,et are +, far the most widel,
utiliIed, /ro+a+l, +ecause this has +een the easiest wa, to +ring information
;igure 6/5 &ommunication Board
?@
to the sho/ Loor. The /ro+lem with te"t is that it is 0er, de/endent not onl,
on an indi0idualPs a+ilit, to learn from a written format +ut also on an
indi0idualPs a+ilit, to accuratel, descri+e actions as /art of a series of motions,
not to mention the cross:cultural language +arriers that can e"ist within the
/lant or when communicating glo+all, regarding /roducts or /roduction
methodologies.
In the /ast, A* drawings and +lue/rints were the onl, means of gra/hicall,
de/icting wor( and were 0er, time consuming to u/date and maintainM
howe0er, with the ad0ent of digital cameras, 0ideo recorders, and /resentation
software, there is no e"cuse for not /ro0iding gra/hic instructions in the
sho/ area. 9ra/hic:+ased wor( instructions are a far more e1ecti0e means
of communication than sim/l, te"t C-igure <.?D. The information can +e
ca/tured quic(l, through a digital camera and mani/ulated with software to
add color:coded legends that identif, wor( content +, o/eration, qualit,
chec(s, s/ecial notes, etc. The +eaut, of color is that it can transcend language
+arriers. If there is a concern o0er em/lo,ees who are color +lind, ma(e use
of standard s,m+ols. A green circle could re/resent wor( contentM a ,ellow
triangle, a qualit, chec(, etc. ."/loded 0iews, /articularl, of assem+l,
o/erations,
are of tremendous +ene2t, +ut the, do require s/eci2c software a//lications.
;igure 6/> Grap$ic *ork Instructions
@A
.ach /icture or slide can re/resent an o/eration or de/ict a +ill of material
for that o/eration with a date, re0ision, and signature +loc( for con2guration
control. )hen there is an im/ro0ement to the /rocess or the introduction
of a new /art, the old gra/hic can +e /ulled and re/laced with a new one in
as little as 54 minutes. The da,s of a manufacturing engineer ha0ing to s/end
se0eral da,s tr,ing to maintain and u/date wor( instructions are o0er.
The de/lo,ment of all 20e of these /rimar, elements of lean manufacturing
is essential for most com/anies to achie0e true world:class le0els of
/erformance. It is through the /ro/er sequencing and timel, im/lementation
of these elements that a com/an, can achie0e that illustrious le0el of
/erformance.
$ut, once this incremental change in /erformance is achie0ed, how
is it sustainedR The ne"t cha/ter will +rieL, touch on this issue.
@7
?
Sustaining t$e &$ange
ow comes the answer to the great m,ster, of how to (ee/ things the
wa, ,ou want them. The answer is X ,ou donPtY 'ou do not want
this /rocess to +e static. 'ou most assuredl, do not want it to fall
+ac(, +ut ,ou do not want it to sta, the same either. )hen com/anies sta,
the same, the, fall +ehind. hange is a constantM therefore, constantl, loo(ing
for new wa,s to im/ro0e the +usiness is the name of the game. If com/anies
are not im/ro0ing, at least at the rate of inLation, then the, are losing, and
ha0ing to face /ricing /ressures from the mar(et Fust com/ounds the seriousness
of the situation. om/anies need to constantl, /ush themsel0es to
challenge the
stat"s -"o
+, /erforming +etter toda, than ,esterda,. So how
is this achie0edR -irst of all, there is a need to institutionaliIe changes that
ha0e +een made to this /oint +, doing the followingB
7. *e0elo/ and de/lo, house(ee/ing audit chec(lists Ci.e., ;SD and ha0e
the management disci/line to re0iew them at least once a month.
3. All o/erational wor( is standardiIed, dis/la,ed, utiliIed as a +asis for
continuous im/ro0ement acti0ities, and im/ro0ed twice /er ,ear.
5. .ach manufacturing cell team is e"/ected to conduct a NaiIen e0ent
e0er, quarter.
6. Sho/Loor /erformance measures are u/dated +, the cell team dail,.
;. Pro+lem +oards are re0iewed at the end of e0er, da,.
?. ell teams hold standu/ meetings e0er, da, to re0iew /rogress and
issues.
<. Actual setu/ times are recorded with each changeo0er.
@. ross:training s(ill matrices are u/dated quarterl,.
=. .qui/ment is cleaned and chec(ed on a dail, +asis.
74. ustomers and su//liers are 0isited +, the cell team each quarter.
1
@:
After the change has trul, +een institutionaliIed, a focus on growing the
+usiness through new /roducts or mar(ets and /roduction ca/a+ilit, is ne"t.
The cell team accom/lishes this +,B
7. Loo(ing at the /roduci+ilit, of its e"isting /roduct +ase.
3. *etermining how lean the current /roduct design is and identif,ing
where o//ortunities e"ist to ta(e additional waste out of the design.
5. UtiliIing failure mode and e1ects anal,sis C-M.AD to im/ro0e the
ro+ustness of the manufacturing /rocess and minimiIe ris( of /oorqualit,
out/ut.
6. Loo(ing for o//ortunities to /ilot new /roduction.
;. Loo(ing for /otential im/ro0ements within the su//lier +ase.
?. Understanding cost, qualit,, and schedule issues with su//liers and
hel/ing them to identif, and eliminate waste from their /rocesses.
)hen ,ou ha0e reached this le0el of ca/a+ilit, within ,our manufacturing
organiIation, ,ou are de2nitel, well ahead of the /ac( and ha0e reached a
le0el 0er, few ha0e actuall, achie0edM howe0er, do not sto/ there. !emem+er
that lean manufacturing is the continual /ursuit of im/ro0ement and it is a
Fourne, that ne0er ends.
III
P.""I1G I"
A'' "GE",ER
@5
@
Setting t$e Stage
his section of the +oo( shows how to design and de/lo, a holistic lean
manufacturing /rogram. The following cha/ters contain a 2ctitious
+usiness stor, in which man, of the tools and techniques descri+ed in
this +oo( are utiliIed. Picture ,ourself in these cha/ters as the new *irector
of Lean Manufacturing for this com/an,, and follow along in the stor, to
learn how to design, de0elo/, and de/lo, ,our own lean manufacturing /rogram.
The stor, descri+es a current +usiness situation and demonstrates use
of the tools 0ia com/leted tem/lates to show how a lean manufacturing
/rogram is de0elo/ed and managed. Ta(e the time to read through the stor,
and understand the tem/lates, as learning +, doing is one of the +est wa,s to
retain (nowledge. H+0iousl,, one cannot instantl, gras/ all of the /otential
issues that need to +e addressed when de/lo,ing a lean manufacturing /rogramM
howe0er, I ha0e tried to include man, of the most common issues that
ha0e arisen o0er the ,ears during m, im/lementations. I ho/e ,ou 2nd this
stor, +oth worthwhile and entertaining.
Setting
!egal, Inc., in incinnati, HH, has +een in +usiness since 7=6;. The, started
out as a small, su+contract su//lier to the hea0, industrial ca/ital:goods
mar(et and +egan to grow when the, /ic(ed u/ small, niche:mar(et contracts
for the machining of s/ecialt, +earings, housings, and /istons. The housing
and /iston wor( came as an o_oad o//ortunit, when the /rimar, su//lier
was o0erloaded. !egal did good, high:qualit, wor( and had e"cellent
res/onse time.
"
@>
H0er the ,ears, !egal was a+le to e"/and the +usiness through niche
growth in the mar(et/lace and /ositioned themsel0es as the Jgo toK /la,er
with the original equi/ment manufacturers CH.MsD when it came time to
design new /roducts. Their re/utation and e"/ertise o/ened man, doors.
These o//ortunities led to further growth in the mar(et and growth within
the +usiness. The com/an, relocated to a ;44,444:square:foot facilit, across
town in 7=@4 and in0ested signi2cantl, in additional ca/ital equi/ment and
0ertical integration to meet the demands of the increased 0olume. The, had
+een achie0ing re0enue increases of a+out 7;W each ,ear for the last ; ,ears
and were enFo,ing o/erating /ro2ts of 34W, with no end in sight.
So, e0er,thing was loo(ing good until one da, one of their 2rst H.M
customers, who had +een with them since the 7=;4s, announced the rollout
of a new /iece of equi/ment which !egal (new nothing a+out. )hen the
com/an, as(ed the H.M wh, !egal had not +een utiliIed for this new design,
the, were told that a di1erent su//lier had +een more res/onsi0e +, o1ering
shorter lead:times, more consistent deli0er, /erformance, and more relia+le
/roduct qualit,, /lus the, /romised a cost reduction of ;W each ,ear for the
life of the contract and no hassles a+out deli0ering /roducts to the H.M
/lants as needed on a dail, +asis. !egalPs management 0iewed this as onl, a
minor set+ac(, until a second long:time H.M canceled an e"isting contract,
/aid the /enalt, for doing so, and went with a com/etitor for the same
reasons.
)ith this additional loss in +usiness, in order to maintain their 34W
o/erating /ro2t, management +elie0ed a reduction in wor( force was the
ne"t logical alternati0e. Hn the da, the, were to ma(e the 2nal decision, a
recruiter called the #ice President of H/erations at !egal and e"/lained that
he had the resum` of an indi0idual that the com/an, might +e interested in
seeing. $ecause the 0ice /resident and the recruiter were long:time 2shing
+uddies, he agreed to re0iew the resum` and had it fa"ed o0er.
Main &ast
Presi&ent+
$rian Ste0ens
'ice Presi&ent o* 2)erations+
*a0id $rice
'ice Presi&ent o* Sales an& C"sto!er Service+
$ar+ara Stearn
'ice Presi&ent o* Pro&"ct 1evelo)!ent+
Samuel $utton
1irector o* ("!an Reso"rces+
Heather *ale
Controller+
Gose/h $illings
1irector o* 8n*or!ation Syste!s+
Paula )right
Setting the Stage
@6
1irector o* Material Manage!ent+
Ste0e Phel/s
Plant Manager+
!ichard Gohnson
Manager o* Pro&"ction ngineering+
arl )ithers
%irst6Line S")ervisor+
Ga(e Holden
1irector o* Lean Man"*act"ring =newly hire&>+
!o+ert Games
4iagnostic Information
Sales ?@@A B
a?5 M
ProCt ?@@A B
a73.4 M
Sales ?@@D B
a<5 M
ProCt ?@@D B
a76.? M
Sales ?@@@ B
a@5 M
ProCt ?@@@ B
a7<.6 M
Sales EFFF B
a?; M C/roFectedD
ProCt EFFF
E a75.4 M C/roFectedD
(ea&co"nt ?@@A B
634
(ea&co"nt ?@@D B
6@<
(ea&co"nt ?@@@ B
;;5
(ea&co"nt EFFF B
655 C/roFectedD
"$e Inter(ie-
The ne"t da,, !o+ert Games arri0ed at !egal, Inc., for an @B44 a.m. inter0iew.
He was ushered into the +uilding and de/osited at the oUce of *a0id $rice,
the #ice President of H/erations. At a+out @B34, *a0id rushed into the oUce,
out of +reath, and introduced himself to !o+ert.
J9ood morningY This /lace is a mad house,K e"claimed *a0id. JI donPt
(now how we could ha0e lost that +usiness, +ut we will Fust ha0e to suc( it
u/ and wor( harder to ma(e it ha//en, I guess.K
J)hat +usiness is thatRK inquired !o+ert.
JHh, a long:time customer of ours, $O* Industries, has decided to design
and de0elo/ its latest /roduct without in0ol0ing us.K
J)h, did the, do thatRK as(ed !o+ert.
JHh, the, made some e"cuse a+out us not +eing res/onsi0e to their needs
and our continuing to raise /rices on them,K re/lied *a0id.
J)ere the, correctRK
J&ot as far as IPm concerned. 'ou see, we ha0e +een doing +usiness with
them for nearl, 64 ,ears, and Fust +ecause some new /la,er has come into
the mar(et/lace, ma(ing im/ossi+le claims a+out reducing /rices ,ear after
,ear and res/onding to their schedule needs on a dail, +asis, the, ha0e
decided to change their lo,alties.K
@?
Jan !egal meet those identi2ed /erformance requirementsRK
J&o wa,Y If we made those (inds of outrageous commitments, we would
lose our shirtY Hur qualit, would su1er, and the rest of our customer +ase
would +e im/acted.K
JIf the mar(et/lace is as(ing for those (inds of requirements, and ,our
com/etition is demonstrating the a+ilit, to satisf, those requirements, donPt
,ou thin( ,ou ma, ha0e more than a short:term /ro2ta+ilit, /ro+lemRK
queried !o+ert.
JI am not so sure that this com/etitor, $lue Iron, can actuall, deli0er
what the, sa,. Their o/eration is located in the southwest, which is not as
geogra/hicall, close to $O* as we are, and, +esides, the deli0er, res/onsi0eness
that $lue Iron is claiming is unheard of in our industr,,K e"/lained
*a0id.
J)ell,K !o+ert said, Jm, +rother:in:law ha//ens to wor( at !egional
onsolidated, which is a maFor customer of $lue Iron, and the, d
o
deli0er
on those e"/ectations. The, do reduce /rices each ,ear through cost reductions
and the, do res/ond to scheduled needs of the customer.K
J*o the, reall,RK
J'es, the, doY Let me as( ,ou, do ,ou get out much to tal( with customers
or do ,ou com/are !egalPs /roducts to the com/etitionPsRK as(ed !o+ert.
J&o,K said *a0id, rather shee/ishl,. J)e donPt get out much at all. So
much of our time is s/ent (ee/ing the o/eration running that there is no
time to get out and see customers or com/are /roducts.K
JLet me as( ,ou this. )hat /ercentage of ,our current sales +ase is made
u/ of new /roductsR I mean /roducts that ha0e +een introduced within the
last three ,ears,K as(ed !o+ert.
J)e ha0e targeted a+out ; to 74W. )e are currentl, at a+out ;.K
JHow ha0e ,ou +een a+le to sustain the growth ,ouP0e had without
introducing new /roducts at a higher rateRK
JMost of the sales growth, in the last cou/le of ,ears, has come from /rice
increases on our current /roducts, +ecause our unit 0olume has +een Lat.K
J)ould ,ou e"/ect those e"isting mar(ets to ha0e requirements similar
to $O* in the near futureRK as(ed !o+ert.
JI donPt (now. I guess I ne0er reall, thought a+out it.K
J)ell, if !egal, Inc., has an, indication that this could +e the new required
le0el of /erformance in the mar(et/lace, I would recommend that ,ou loo(
at a di1erent wa, to align ,our o/erations to /erform at that new le0el,K
!o+ert o1ered.
J*o ,ou (now of a wa, to do thisRK
JThatPs wh, IPm here. So, letPs tal(XK
@@
7A
,o- It Begins
hen *a0id introduced !o+ert to !egalPs to/ management team
as the new *irector of Lean Manufacturing, there was a fair
amount of e,e rolling and +lan( stares in the room. *a0id
e"/lained to the grou/ that, due to the recent de0elo/ments with $O*, there
ma, +e the need to re:e"amine how the, currentl, conduct +usiness. JThere
is an indication,K said *a0id, stretching the truth a little, Jthat this ma, +e
onl, the +eginning of a long wa0e of com/etiti0e erosion of our customer
+ase. )e need to re0isit how we are currentl, conducting +usiness +efore we
Fust eliminate heads from the /a,roll.K
$rian Ste0ens, President of !egal, as(ed, J)h, do we need to re0isit our
current mode of o/erationsR If we Fust get some of the e"cess heads o1 the
+oo(s and ma(e e0er,one aware the, need to wor( harder, we should +e all
right. )e can weather this storm. $esides, this com/etitor wonPt +e a+le to
deli0er on these /romises, and $O* will come +ac( to us, hat in hand, within
the ne"t si" months.K
JIPm afraid thatPs not true,K re/lied !o+ert. JI (now a+out this com/an,
through se0eral of its current customers, and $lue Iron
&oes
deli0er on their
/romises. The, do quite well in their niche mar(ets and are +eginning to
e"/and into additional areas, !egalPs +eing one of them. The, a//ear to target
mar(ets that ha0e growth o//ortunities coming through new /roduct
de0elo/ments.
The, align with customers who are loo(ing to attain the ne"t le0el
of /erformance and who are disenchanted with their current su//l, +ase of
mature, slow:mo0ing com/anies.K
J)hat le0el of /erformance are we tal(ing a+outRK as(ed $ar+ara Stearn,
#ice President of Sales and ustomer Ser0ice.
JThe +enchmar( for man, com/anies stri0ing for world:class le0els of
/erformance would +e ;4\ in0entor, turns /er ,ear, same:da, deli0er, on
*
7AA
customer orders, manufacturing lead:times of one wee( ma"imum, in:/rocess
qualit, le0els a//roaching ==W roll:through ,ield, and annualiIed cost
reductions of ; to 74W each and e0er, ,ear,K said !o+ert.
JThose /erformance le0els are unheard of in our industr,YK +ar(ed !ichard
Gohnson, !egalPs Plant Manager. J&ot one of our customers is e"/ecting
us to achie0e those le0els of /erformance.K
JIPm afraid that customers ha0e a funn, wa, of deciding what is and is
not an acce/ta+le le0el of /erformance,K said !o+ert. J'ou see, the /erformance
target is constantl, changing, and if one of ,our customers hears a+out
a com/etitor who is achie0ing such le0els of /erformance, that now +ecomes
the new standard for that customer. Thin( a+out it ,ourself, as a consumer.
Ten ,ears ago, when ,ou wanted new or re/lacement /arts for ,our car or
some consumer electronics giImo, ,ou went to the retail outlet, told them
what ,ou wanted, and ho/ed that the, carried it in stoc(. If the, didnPt, then
,ou were /laced on +ac(order and the /art ma, ha0e shown u/ 6 to ? wee(s
later. Toda,, ,ou search the Internet for what ,ou want and order it, and it
arri0es at ,our door in man, cases the ne"t da,. Ten ,ears ago, most consumers
would ha0e ne0er dreamed of that (ind of res/onsi0eness, +ut the,
are coming to e"/ect it toda,, Fust as $O* is now demanding new le0els of
/erformance from its su//l, +ase.K
J$ut $O* is onl, one of man, customers we ha0e. Surel, the, wonPt all
demand that le0el of /erformance, will the,RK as(ed $ar+ara.
JI donPt (now, $ar+ara. Ha0e ,ou as(ed them latel,R Ha0e we inquired
a+out what /erformance le0el the, need or are recei0ing from the com/etitionR
*o we (now how we stac( u/R Are we leading or laggingR As head of
sales and customer ser0ice, do ,ou ha0e an, information relati0e to thisRK
inquired !o+ert.
J)e (ee/ some information in our data+ase as to the com/etition, +ut
it is gathered onl, when we introduce a new /roduct line, which has +een a
while,K stated Samuel $utton, #ice President of Product *e0elo/ment. JIn
additionXK
After a+out an hour of discussion among the management team, the,
2nall, reached the general consensus that !egal, Inc., was not reall, /re/ared
to com/ete in the mar(et/lace of the future. The, all agreed it was a good
idea to +ring !o+ert on +oard to let him guide their o/eration down the
/ath to +ecoming a lean manufacturer.
7A7
77
"$e Game Plan
he /roFect team assigned to design, de0elo/, and de/lo, this lean manufacturing
/rogram met the following Monda,, August 3. The team
consisted of se0en full:time, dedicated em/lo,ees, including the team
leader, !o+ert. The team consisted of Heather *ale, from Human !esourcesM
Gose/h $illings, the controllerM Paula )right, from Information S,stemsM Ste0e
Phel/s, who re/resented materials managementM !ichard Gohnson, who
re/resented
/lant managementM and arl )ithers, from Production .ngineering.
The, s/ent a signi2cant amount of time that morning discussing wh, the,
were together, wh, there was a need for this team, wh, were the, selected,
what
the, were e"/ected to accom/lish, etc. !ichard s/ent much of the morning
e"/laining who he was, wh, he was there, wh, the, were there, and wh, this
was an e"tremel, im/ortant /rogram for the future of the organiIation.
After a+out four hours of discussion, de+ating, 0enting, and clarif,ing,
the, e0entuall, +ecame comforta+le a+out the /roFect and its o+Fecti0es. The,
s/ent time writing out a /roFect charter C-igure 77.7D to clarif, their
understanding
with e"ecuti0e management in regard to the o0erall sco/e and o+Fecti0es
for the /roFect. The, identi2ed /otential ris(s, issues, and assum/tions
a+out the /roFect. Through !o+ertPs facilitation, the team identi2ed s/eci2c
goals for the lean manufacturing /rogram, de0elo/ed an o0erall rolling:wa0e
milestone /lan C-igure 77.3D that co0ered the /roFect duration, and assigned
su+Fect matter e"/erts aligned with the -i0e Primar, .lements as followsB
A
HrganiIation .lement E Heather *ale
A
Logistics .lement E Ste0e Phel/s
A
Process ontrol .lement E arl )ithers
A
Manufacturing -low .lement E !ichard Gohnson
A
Metrics .lement E Gose/h $illings
"
7A:
$ecause the team had de0elo/ed this /lan together, the, had a common
understanding of where the, were going, what the, were going to accom/lish,
and what success loo(ed li(e when the, got there.
Hn August =, !o+ert had the team meet with e"ecuti0e management to
demonstrate their understanding of the assignment, to assure clari2cation of
/roFect direction and /roFect duration, and to esta+lish goal alignment. After
the, recei0ed e"ecuti0e managementPs /ermission to mo0e forward, the /roFect
team /roduced a 74: to 73:slide /resentation for e"ecuti0e management to
deli0er to the organiIation. It contained an o0erall stor, line e"/lainingB
7. The current state of the +usiness
3. )h, a lean manufacturing /roFect team had +een assem+led
5. The /roFect teamPs charter
6. The o0erall schedule Cmilestone /lanD
;. ManagementPs commitment to (ee/ e0er,one informed as to /roFect
/rogress
?. How e0er,one would 2t into the o/eration when it was designed
;igure 77/7 ProCect &$arter
Regal# Inc/
TitleB
Pur/oseB
H+Fecti0eB
HutcomesB
ProFect HwnerB
Team LeaderB
ProCect &$arter
-ormB 476
'ean Manufacturing Program :7
*esign, de0elo/, and im/lement a lean manufacturing en0ironment
+, focusing on the 0alue stream for in:house manufacturing and
material Low.
C7D Autonomous /roduction units. C3D Self:directed wor( teamsM relia+le
and /redicta+le demand management. C5D Nnowledge transfer of lean
manufacturing techniques. C6D Mo+iliIe cross:functional /roFect team.
C;D -acilit, la,out and /roduct /erformance res/onsi+ilit, aligned +,
/roduct grou/ing. C?D Assess and select cell team leaders.
C7D Im/ro0ed deli0er, /erformance from ;?W to =@W to !S*.
C3D Manufacturing lead:time of less than 7 wee( for all /roduct
grou/ings. C5D In0entor, turns C!M, )IP, -9D of 5;.
C6D *irect la+or /roducti0it, im/ro0ement of 3;W on runner /roducts.
C;D A ;4W reduction in all identi2ed &#A acti0ities.
$rian Ste0ens
!o+ert Games
The Ga!e Plan
7A<
)hen $rian deli0ered the message to the organiIation, through a town
hall meeting, he o/ened +, sa,ing, J)e at !egal ha0e enFo,ed man, ,ears of
success, and we wish to continue in that same tradition of success. The wa,
we ha0e conducted +usiness u/ to this /oint has +rought us all a great deal
of +ene2t. )e ha0e achie0ed great success in growing our o/eration and
should +e /roud of our accom/lishments. Howe0er, in order for us to continue
growing our com/an,, we need to loo( at conducting +usiness in a
di1erent manner. om/etition is getting tougher, and it would a//ear there
are a num+er of com/anies ni//ing at our heels and loo(ing to ta(e our
customers awa,. )e cannot continue to sur0i0e without a customer +ase,
and our customer +ase is +ecoming more and more demanding.
JSo, as our customerPs requirements change, so too do we need to change.
Therefore, in light of this situation, we ha0e assem+led a cross:functional
team sta1ed with some of our +est /la,ers, who will +e wor(ing full time for
the ne"t ? to = months on designing and im/lementing a new manufacturing
o/eration. The, will +e coming to ,ou for information, as(ing for ,our in/ut,
and see(ing ,our hel/. I would as( that ,ou /ro0ide them with honest, factual
information and when as(ed for ,our o/inion to res/ond o/enl,. As /art of
the anal,sis and design /rocess, the, will +e coming to ,ou for concurrence
and feed+ac( regarding the design. 'our in/uts are im/ortant. )ithin the
ne"t three months, we will +egin to im/lement this /rogram and will again
;igure 77/: Milestone Plan
Regal# Inc/
ProFect &ameB A$ Lean Manufacturing Program
ProFect ZB 37
: Lean Assessment is om/lete O A//ro0ed
7A=
+e soliciting ,our ideasM howe0er, during im/lementation, ,ou will +e the
maFor /la,ers in the /rocess +ecause ,ou will +e in0ol0ed in the actual design
and arrangement of ,our wor( areas. 'ou will ha0e a sa, as to what goes
where and how the wor( will Low. )e will +e guided +, some new o/erating
/rinci/les, +ut ,ou will ha0e an o//ortunit, to design out man, of the wastes
that are currentl, /art of ,our e"isting /rocesses.
JThis will all +ecome more clear as the coming months unfold and we
will +e in a more informed /osition to answer man, of the questions I am
sure ,ou ha0e at this /oint. )e will +e setting u/ a suggestion +o" for +oth
ideas and questions concerning the /rogram. As the team gets further into
the /rogram, we can re/ort on /rogress and answer more of the questions
as we go along. This is a 0er, e"citing time for us at !egal. I (now change
can +e diUcult and a little scar,, +ut if we all (ee/ a /ositi0e attitude and
o/en mind as to what de0elo/s, I am con2dent we will come out on the other
side a much stronger and more ca/a+le organiIation for our customers. I
than( ,ou in ad0ance for ,our su//ort.K
7A5
7:
'ean Assessment
fter $rianPs announcement to the organiIation, the team was read,
to +egin /hase one E Lean Assessment. The /roFect team set u/ their
war room, went through three da,s of intense lean manufacturing
training on the -i0e Primar, .lements with !o+ert, and +egan the tas( of
assessing the o0erall le0el of leanness of the o/eration C-igures 73.7 to 73.6D.
$, August 7=, the team had gathered the lean ga/ anal,sis information
+, /roduction /rocess and loaded it into the /roFect data+ase. The, were
now read, to +egin documenting o/erational /erformance data +, +oth
/roduct grou/ and /rocess C-igure 73.;D.
$efore the, +egan collecting the /erformance data, Paula made the comment
to the team, JI +elie0e much of the data we need are contained within
our +usiness s,stem.K
!o+ert stated, J.0en though that ma, +e true, Paula, I would encouraged
the team to go to
ge!ba
bthe Ga/anese word for wor( sitec to retrie0e the
data. .0en though much of the identi2ed data could reside in the s,stem, it
ma, not +e accurate, and this initiati0e needs to +e a 0er, hands:on /rogram.
In addition, it is im/ortant for us to +e seen on the sho/ Loor, tal(ing with
the o/erators and gathering their insight. The, are going to +e 0er, s(e/tical
at this /oint, and we need to +e (eenl, aware of their concerns. )e will need
to use the s,stem:generated data, +ut Fust not as the 2rst source at this time.K
The team created a +aseline tem/late for the data collection, +ro(e into
/airs, and went to the sho/ Loor to learn a+out the current manufacturing
/rocesses. The, alread, had an idea a+out the current wea(nesses in the
o/eration +ased on the lean assessment scoring, which was com/leted earlier.
The team segregated the sho/ +, assem+l,, fa+rication, and /roduct grou/s.
Heather and arl too( assem+l,, !ichard and !o+ert too( fa+rication, and
Gose/h and Ste0e too( /roduct grou/s.
A
7A>
)hen as(ed +, Heather what he thought a+out all this, arl answered, JI
donPt (now. It seems li(e a sound a//roach on /a/er, +ut that is onl, /a/er.
)hat ha//ens in im/lementation, now thatPs realit,. I am not quite sure ,et
how we design out our current o/erational /ro+lems and de0elo/ a s,stem
that is res/onsi0e to these new le0els of /erformance. )hat do ,ou thin(RK
;igure 7:/7 &ontinuous "raining
;igure 7:/: 'ean Manufacturing Benc$mark
Lean Assess!ent
7A6
JI am concerned a+out how the /eo/le are going to /ercei0e the lean
manufacturing /rogram,K said Heather. JI mean, we want to in0ol0e them
and solicit their in/ut, +ut I Fust donPt (now how the, are going to +u, in to
the changes. It seems to me that, to engage them in the /rocess, we need to
;igure 7:/< 'ean Manufacturing Benc$mark: Scoring
;igure 7:/= &ell Audit
,
ell name was hardl, 0isi+leM howe0er, +oundaries were well mar(ed on the sho/
Loor. A larger C/oster:siIeD cell name should +e utiliIed.
It was 0er, e0ident on all /art num+ers 0iewed. P$ su+assem+lies are using Nan+anM
howe0er, not at the /lanned le0els.
A wor(a+le wor( /rocess was su//osed to ha0e recentl, +een documentedM howe0er,
it still requires additional de0elo/ment.
A wor(a+le wor( chec(list is +eing utiliIed.
7 3 5
incinnati, HH Scoring
Nan+an
74 .qui/ment rearrangement
com/lete
7A?
2nd out what would moti0ate them to change. Show them where the, 2t
into the /rogram.K
JI thin( ,ou ha0e a good /oint there. )hen we get a chance, we need to
tal( with !o+ert a+out those issues,K said arl.
As !ichard and !o+ert made there wa, to the +ac( sho/s, where the
fa+rication o/erations were located, a 2rst:line su/er0isor named Ga(e
a//roached !ichard and as(ed, JAm I going to ha0e a Fo+ when this is o0er,
Mr. GohnsonR $ecause I ha0e a cousin o0er in Louis0ille who went through
one of these Vlean thingsP and the, laid o1 nearl, half the /lant and outsourced
almost all the wor( to somewhere else.K
!ichard reassured him +, sa,ing, JGa(e, ,ou do not ha0e to worr, a+out
losing ,our Fo+ as a result of this lean /rogram. )hen all is said and done,
,our Fo+ ma, ha0e changed or ,ou ma, +e doing a di1erent Fo+, +ut ,ou
wonPt +e eliminated from the /a,roll, unless, of course, ,ou do not want to
wor( in the new lean manufacturing en0ironment. 'ou see, the thing is if we
donPt do something li(e this now there is a good chance I will need to send
/eo/le out the door later, and I donPt want to do that.K
JI understand,K said Ga(e.
As Ste0e and Gose/h made their wa, to the shi//ing area to as( the /ac(ers
questions /ertaining to the handling times of SNUs, Gose/h made the statement,
JThis /rogram is reall, going to /la, ha0oc with m, o0erhead a+sor/tion
num+ers. All the indi0idual de/artment allocations are measured +,
each o/erationPs hours /roduced /er da,. If we start changing the focus to
;igure 7:/5 'ean Assessment 4ata &ollection Items
% S/ace Csq. ft.D
% )IP le0el Ca or equi0alentD
% Tra0el distance C/arts and /eo/leD
% Manufacturing lead:time CunitsD
% *T* lead:time Cda,sD
% Hut/ut//erson/unit C/c/minuteD
% .Ucienc, CWD
% hangeo0er time CminutesD
% Sta1 le0el CheadsD
% Un/lanned downtime CminutesD
% Scheduled time ChoursD
% Actual time ChoursD
% Planned out/ut CunitsD
% Actual out/ut CunitsD
% Planned mfg. c,cle time CminutesD
% Actual mfg. c,cle time CminutesD
% Z of units rewor(ed
% Z of units defecti0e
% .m/lo,ee turno0er CWD
% .m/lo,ee a+sences CWD
% Annual out/ut 0olume CunitsD
Results reIected
2y process# 2y product
Lean Assess!ent
7A@
actual out/ut for a cell, our o0erhead ma, not +e a+sor+ed as it has +een
+udgeted and that will lea0e us under:a+sor+ed, which a1ects our /ro2t
num+ers.
J$ut, it has +een that indi0idual focus on VlocaliIed o/erationsP and /roducing
more hours than we need to satisf, the customer demand that has
caused us to ha0e the long lead:times that now e"ist in the factor,,K said
Ste0e. J)e need to concentrate on im/ro0ing the o0erall /rocess and quit
focusing on the indi0idual o/erations, if we e0er e"/ect to achie0e the le0els
of /erformance that ha0e +een targeted.K
As the /roFect team was gathering information on the /rocess, Paula was
setting u/ the data+ase that would house all the data +eing collected. She
de0ised a sim/le s/readsheet design with ta+s for each of the /roduct grou/s
according to /roduction /rocess. This wa, no matter what data the, needed
for anal,sis, the, were 0er, eas, to e"tract. As each team com/leted their
tem/lates, the, were turned into a data entr, cler( to load into the data+ase.
Hnce the /roFect team had com/leted the data gathering, the, were read, to
de0elo/ an understanding of the mar(et/lace.
!o+ert showed the /roFect team two tem/lates C-igures 73.? and 73.<D
and told them to identif, who in the organiIation had access to the information
necessar, to com/lete the requested information. Paula felt that she
ma, +e a+le to e"tract some of the data from the +usiness s,stem, +ut most
of it would ha0e to come from other sourcesB JI (now I can /ull and segregate
;igure 7:/> Manufacturing Strategy: Market Segmentation
77A
the sales data +ased on histor,, +ut the total mar(et and /otential mar(et
ha0e to come from sales and customer ser0ice.K
arl stated, JI donPt thin( customer ser0ice would +e the /lace to 2nd
those /roFected data. I thin( /roduct de0elo/ment should ha0e a 0iew of the
total mar(et requirements.K
JMa,+e we need to tal( with +oth,K said !o+ert. J)h, donPt we +ring in
$ar+ara and Samuel, with a few of their /roduct e"/erts, and discuss with
them who has access to which data and then wor( with those e"/erts to
com/lete +oth of these tem/lates. !emem+er, we need to ha0e a /rett, relia+le
0iew of the current mar(et/lace, /articularl, where s/eci2c /roduct o//ortunities
e"ist, and in/ut from the customers as to where we are com/etiti0e
and where we are not. This is where much of our design criteria information
will +e drawn from in order to align with mar(eting as we get into the -uture
State *esign /hase.K
As the team com/leted this 2nal data:gathering e1ort, the, were a+le to
draw a good /icture of how !egal stood in relation to the conce/t of lean.
The, had an increased understanding of the mar(et/lace through actual data
collected from the customers through sur0e,s and inter0iews. The, /resented
their 2ndings to e"ecuti0e management on August 3<. There was not a lot of
de+ate o0er the num+ers Cwhich had +een seen in the /astD, +ecause the
/rocess
owners $ar+ara and Samuel had +een /art of the e"ercise and had alread,
+ought into the 0alidit, of the data. U/on recei0ing a//ro0al for the wor( in
/hase one, the team was released to mo0e onto /hase two E urrent State 9a/.
;igure 7:/6 Manufacturing Strategy: &ompetiti(e &riteria
777
7<
&urrent
State Gap
he 2rst order of +usiness for the /roFect team was to gain a +etter
understanding of the o0erall /rocess Low of the factor,. The, all had
their own ideas a+out how the, thought the /rocess wor(ed, +ut
no+od, was con2dent a+out reall, (nowing for sureM therefore, !o+ert once
again had the /roFect team s/lit into grou/s. The 2rst grou/ consisted of
Paula, !ichard, and Ste0e, who were to create an o0erall material and
information
Low ma/ of the o/eration to gain a +etter insight into how the
/h,sical material and information currentl, Lowed within the /lant. The,
would identif, the communication lin(s +etween su//liers and customers
Cinternal and e"ternalD, the medium used to /resent the information, and
how often there was an information transaction C-igures 75.7D.
The second grou/ was made u/ of Heather, arl, and Gose/h, who were
gi0en the tas( of generating a Le0el 4 and Le0el 7 /rocess ma/ of the current
/roduction /rocess. The, were shown how to gather the necessar, information
through a su//lier:in/ut:/rocess:out/ut:customer CSIPHD methodolog,
C-igure 75.3D. !o+ert challenged the teams to gather enough information
a+out the e"isting /rocess in order to ma(e good decisions in the -uture
State *esign /hase, +ut not so much information that the, got +ogged down
with anal,sis /aral,sis. JThat is wh, it is im/ortant to sta, at a Le0el 4 and
Le0el 7 for the SIPH,K he e"/lained. J)e are tr,ing to descri+e VwhatP is
ha//ening in the /rocess, not Vhow.P )e ha0e targeted two wee(s for com/letion
of this e1ort, /er our milestone /lan. In order to sta, on schedule,
we need to +e read, to /erform root cause anal,sis +, Se/tem+er 74.K
"
77:
$, <B54 a.m. Monda, morning, +oth grou/s were o1 and running. Paula
had ta(en the lead for de0elo/ing the material and information Low ma/.
H0er the wee(end, she had +een thin(ing a+out how the, might a//roach
it. JI thin( if we identif, the /roduction /rocesses that were loaded on the
data+ase and re0iew the /roduct families we created during wee( three, we
will ha0e a good indication as to where to start. I thin( we should la, out
the maFor /rocesses on a white +oard and re/resent the /rimar, /h,sical
material Lows with the color green and show the /rimar, information Lows
in red.K
JHnce we ha0e that de0elo/ed, we can inter0iew those in the /rocess as
to the format or medium used to transmit the information. 'ou (now X
fa", or a hot list, or 5
; card, or electronic, whate0er,K e"/lained !ichard.

JAnd, once we ha0e these data, we can +egin to measure how long it ta(es
for the information to change hands and how often,K Ste0e said.
J!emem+er,K Paula /ointed out, Jit is e"tremel, im/ortant that we 0erif,
the data with the /rocess owners or those who wor( in the /rocess. Ma,+e
we should schedule a meeting ne"t Monda, with se0eral of the 2rst:line
su/er0isors E Ga(e and $en and /ossi+l, &at E to 0alidate what we 2nd.K
;igure 7</7 Material and Information ;lo- for 'ean Implementation
C"rrent State Ga)

77<
JThat sounds li(e a good idea to me. I will ma(e sure that the, will +e
a0aila+le earl, ne"t wee( to do that,K said !ichard.
As the 2rst grou/ was ma(ing /lans for the material and information
ma/, the mem+ers of the second grou/ were ma(ing similar /lans to ca/ture
the Le0el 4 and Le0el 7 SIPH data.
J)hat do ,ou thin( a+out starting with out/uts +, /roduct grou/ing,
identif,ing the a//ro/riate customers for those out/uts, and then documenting
the ste/s in the /rocess that generate those out/utsRK as(ed arl.
JThat sounds reasona+le to me,K said Gose/h. JThen we can list the su//liers
for the /rocess and record the in/uts.K
JI thin( I would do it the other wa, around,K argued Heather. JI would
identif, the in/uts that trigger the /rocess to +egin and then document those
su//liers who su//l, those in/uts.K
JI can li0e with doing it that wa,,K said Gose/h. JAs long as we get done
+, Se/tem+er 74.K
arl ga0e Gose/h a loo(. JHnce we ha0e Le0el 4 documented for the o0erall
o/erations /rocess, we can then +rea( out the le0el 7 su+/rocesses into their
s/eci2c acti0ities,K said arl.
;igure 7</: 'e(el 7: Supplier Interface
77=
JNee/ in mind there ma, +e se0eral Le0el 7 /rocess Lows. )e should
/ro+a+l, segregate the Lows +, customer interface, su//lier interface,
manufacturing,
and /roduction//lanning control. Also, remem+er that !o+ert
told us to limit the num+er of ste/s to +etween ? and 73, so as not to go too
dee/ into the /rocess.K
Heather continued, JI thin( if we a//roach our largest /roduct famil,
2rstXK
$, the +eginning of Se/tem+er, the two grou/s had made good /rogress
on each t,/e of /rocess ma/. The, documented all the maFor acti0ities,
ca/tured the information lin(ages, understood how /h,sical material was
trans/orted around the sho/, and recorded the time required for each /rocess
ste/ and the out/ut /erformance for each /roduct grou/ing. In addition,
the, had 0eri2ed this information with the /rocess owners and recei0ed +u,in
on the data. )hen Se/tem+er 74
arri0ed, it was time to +egin anal,sis of
the +aseline data.
In order to guide the decision /rocess used in determining C7D the
sequence and /riorit, for im/lementation, C3D which areas were in need of
the most hel/, and C5D Fusti2cation for additional e"/enditures, the /roFect
team needed to conduct a root cause anal,sis of the current o/erating
en0ironment.
!o+ert once again had the team +rea( u/ into two grou/s. The
2rst grou/, led +, arl, was to concentrate on the anal,sis of /roduction and
schedule loss. The second grou/, led +, Ste0e, was to address waste JmudaK
issues and elements anal,sis. These two grou/s were instructed to e"tract
data from their +aseline data+ase, /rocess ma/s, o+ser0ations, inter0iews,
mar(eting data, and the lean assessments to generate a clear /icture of where
wastes could +e found in the current o/eration, the associated causes of the
wastes, and their im/act on +usiness /erformance. .ach grou/ agreed to a
;:da, wor( window to com/lete these tas(s and e"/ected to 2nish on Se/tem+er
7<, after which the, would /resent their 2ndings to e"ecuti0e management
on Se/tem+er 37.
As arl, Paula, and !ichard headed for the war room to +egin /lotting
their ne"t mo0e, Paula as(ed arl if he had a clue as to how the, were going
to come u/ with this information. arl re/lied, JI ha0e +een mulling o0er
this one since !o+ert showed it to us during wee( two and I thin( I ha0e a
/lan. I want to determine a standard out/ut or scheduled amount for each
/roduct +ased on the /remise of ma(ing toda, what we need toda,. I then
want to e"tra/olate the data we re0iew this wee( on a monthl, +asis, and
then I want to com/are the data to the standard. The results are not intended
to +e additi0e, +ut rather show order of magnitude for the /ro+lems.K
J*id ,ou understand what he Fust saidRK !ichard as(ed Paula.
C"rrent State Ga)
775
JI heard him sa, he had a /lan, +ut after that I ha0enPt a clueYK e"claimed
Paula.
JLet me tr, again,K said arl. JIf I ha0e a /roduction area that is required
to /roduce 744 units /er da, to meet dail, customer demand, and the current
Vroll:through ,ieldP on that /rocess is @4W, then I ha0e a /roduction loss of
34 units /er da,, or 644 /er month if there are 34 wor(ing da,s in a month.
&ow, if that same /roduction area has un/lanned equi/ment downtime of
3 hours /er da,, that would translate to a /roduction loss of 3? units /er
da,, or ;34 /er month.K
JHow did ,ou 2gure thatRK as(ed !ichard.
J)ell, if we currentl, run on a one:shift o/eration of <.; hours /er shift,
that means we need to /roduce 75.5 units /er hour, which I got +, di0iding
744 +, <.;. Multi/l, that +, the 3:hour loss /er da, times 34 da,s /er month,
and ,ou get ;34 units lost /er month,K e"/lained arl. J!emem+er, I did not
sa, the num+ers were additi0e, Fust that the, re/resented order of magnitude.K
JH(a,, I guess I understand the /roduction loss, +ut what a+out this
schedule loss,K as(ed Paula.
JThat one too( a +it more wor(, +ut I thin( it could wor( li(e this,K said
arl. JThin( a+out the se0en (inds of waste VmudaP that !o+ert tal(ed a+out
during the lean manufacturing training. He tal(ed a+out waiting, tra0el,
dela,s, etc. These (inds of waste can signi2cantl, im/act an o/erator who is
su//osed to +e doing 0alue:added wor(. If I ha0e an o/erator who is idle 54
minutes waiting for /arts or has to s/end 34 minutes loo(ing for a for( truc(
to gather tooling for a setu/, that would +e a schedule time loss +ecause he
is not a+le to /erform 0alue:added wor(. -or e"am/le, if I determine that
an o/erator is s/ending 7.; hours /er da, chasing down tooling and his
/roduction area needs to /roduce 744 /arts /er da,, li(e +efore, then his
/otential schedule im/act could +e 75.5 /arts /er hour times 7.; hours /er
da,, which would +e a schedule loss of 34 /arts /er da,.K
JI see,K said !ichard. JSo, we would gather /rocess /erformance data
a+out each /roduction area and /rioritiIe the causes +ased on the magnitude
of the im/act.K
J."actl,,K said arl.
JI ho/e ,ou two (now what ,ou are doing,K sighed Paula.
As arlPs grou/ wor(ed their wa, through the data and +egan to categoriIe
the causes and magnitude of the wastes, the, +egan to disco0er some 0er,
interesting /erformance im/acts relati0e to the current o/eration. It was
through the gathering of the data and /lacing them in this format that the,
+egan to de0elo/ an a//reciation for Fust how much loss was ta(ing /lace
within the +usiness C-igure 75.5D.
77>
Ste0ePs grou/, on the other hand, did not +egin +, going to the war room.
Instead, the, went out to +rea(fast. Ste0e o1ered to treat them to +rea(fast
for a chance to get awa, to gather their thoughts and collecti0el, decide the
+est wa, to a//roach this ne"t tas(. JHow do ,ou two thin( we should tac(le
this ne"t assignmentRK inquired Ste0e.
$etween mouthfuls, Gose/h said, JI donPt care as long as we are done +,
-rida,.K
J'ou are a real stic(ler when it comes to schedules, arenPt ,ou, GoeRK
e"claimed Heather.
J)hat can I sa,R IPm an accountant,K e"claimed Gose/h. JI ha0e li0ed for
month:end closings all m, life. ItPs in m, +lood.K
JAre ,ou li(e this at homeRK as(ed Heather.
J'ou +et,K said Gose/h.
JHow does ,our wife stand itRK inquired Heather.
JAfter awhile, I +egin to grow on ,ou,K claimed Gose/h.
Heather ga0e u/. J)hat do ,ou thin(, Ste0eR How do ,ou thin( we should
/roceedRK as(ed Heather.
;igure 7</< Production 'oss

C"rrent State Ga)
776
JI guess I do not see this as +eing all that diUcult. As I thin( +ac( to
when !o+ert 2rst showed us the issue/element matri", it seems to me that
itPs a matter of identif,ing each of the current /roduction areas and listing
all of the /rominent issues in the area. I +elie0e we can gather enough
information from the data+ase to generate a su+stantial list of issues for each
area. After ha0ing identi2ed the +usiness issue a1ecting each area, itPs a matter
of categoriIing them according to the wastes that are contri+uting to those
issues C-igure 75.6D. -rom there, we will +e a+le to identif, which elements
are necessar, to 2" the +usiness o/eration /ro+lem we are e"/eriencing. How
does that sound to ,ou, GoeRK
JSounds 2ne to me, as long as we are done +, -rida,,K he said.
Heather and Ste0e Fust loo(ed at each other and shoo( their heads.
$, -rida,, Se/tem+er 7<, each of the grou/s had +een a+le to create
either a matri" or Pareto diagram +, /roduction area. The, were a+le to
then s/end the following Monda, and Tuesda, morning /ulling their e"ecuti0e
management de+rie2ng /resentation together. The /rimar, /ur/ose
;igure 7</= 'ean Manufacturing Issue0Element Matrix
77?
of the /resentation was to secure management agreement as to the magnitude
of the /ro+lem, to /ro0ide an understanding of the le0el of /otential
+ene2t a0aila+le, and to e"/lain where the le0erage /oints were to guide the
sequence for im/lementation. In addition, the team had created a quic(hit
list of short:term im/ro0ements that were disco0ered during the /roduction
and schedule loss anal,sis.
!o+ert (new this would +e the 2rst real, tangi+le loo( +, !egalPs e"ecuti0e
management at how large the ga/ was and how great the o//ortunit,. It also
was the 2rst /reliminar, 0iew into how much mone, the, ma, +e required
to s/end to ma(e this /rogram a success. The team recommended that the
to/ 20e /roduction loss areas +e targeted for NaiIen im/ro0ements immediatel,
as /art of the ne"t /hase. The /resentation was made Fointl, +, Ste0e
and Heather and was a great success. The /roFect team recei0ed a//ro0al to
ad0ance onward to /hase three E -uture State *esign.
;igure 7</5 Nuick3,it 'ist
77@
7=
;uture State
4esign
n )ednesda,, Se/tem+er 33,
$rian assem+led the team in the war
room and congratulated them on a Fo+ well done. He /ointed out
that the, had made tremendous /rogress to this /oint and were
right on schedule. J&ow that we ha0e come to an agreement as to where we
are, we can now +egin the Fourne, of designing where we want to +e. This
is where the fun startsYK
!o+ert then e"/lained to the /roFect team, JHur 2rst ste/ will +e to create
a conce/t design of the entire factor, Loor. )e will determine how /h,sical
material Lows +etween the new manufacturing cells. )e will generate a +loc(
la,out for the /lant. )e will anal,Ie /roduct demand +eha0iors and understand
the o0erall resource requirements for staUng and equi/ment.K
JHow long will this ta(eRK as(ed Gose/h.
JAccording to our original milestone /lan, we ha0e one wee(,K said
Heather.
JAfter anal,Iing the /art Low +etween /roduction areas, o+taining a
+etter understanding of /rocess 0ariation, and considering what we now
(now a+out the mar(et /lace e"/ectations, I +elie0e we should e"/and the
target com/letion to two wee(s,K stated !o+ert. J$rian and I ha0e alread,
had this discussion, and he agrees we should e"tend the deli0er, date in order
to get the Fo+ done right. )e ma, +e a+le to ma(e it u/ in detail design or
de2nitel, as /art of im/lementation. This /hase is e"tremel, im/ortant,
+ecause it sets the foundation and direction for the whole rest of the /rogram.
)ould e0er,one agreeRK
The grou/ as a whole nodded their heads in con2rmation.
7:A
JH(a,, then,K said !o+ert. JI would li(e to than( $rian for his words of
encouragement to the team and in the same +reath I would li(e to as( him
to lea0e so we can get some wor( done.K
$rian nodded his head and made his wa, to the door.
J&ow, what should we do 2rstRK as(ed !o+ert. JThe s/eci2c deli0era+les
for conce/t design include the num+er of cells required, an assessment of
demand +eha0ior, the new demand management /rocess, /lant load /ro2les,
staUng /roFections, +loc( la,outs, /roduct alignment to cells, im/lementation
logic, clari2cation of design criteria, a weighted decision matri" for
la,out o/tions, organiIation chart, +usiness cases for Fustif,ing e"/enditures,
and de2ned e"it criteria for each of the cells. *oes an,one want to recommend
an a//roachRK
JIf it were u/ to me, I would ma(e sure I had clari2cation on the design
criteria so I (new what we were designing the /rocess to achie0e,K said arl.
JThen I would want to understand m, /roduct demand +eha0ior so I understood
which /roducts were high 0s. low 0olume and what (ind of demand
0ariation I need to accommodate.K
JI agreeM that is an e"cellent starting /oint,K said !o+ert. J)hat ne"t,
!ichardRK
JI would ta(e a shot at aligning which /roducts could +e grou/ed into
which cells. I would consider aligning +, end customer, high 0olume, grou/
technolog,, common routing, material t,/e, etc. I would loo( at the di1erent
o/tions and select the a//roach that +est 2ts our design criteria,K o1ered
!ichard.
JI thin( those are the right items, +ut I would do them in the re0erse
order,K said Paula. JI thin( we should agree on the +est o/tions 2rst and then
allocate /roducts to cells. If we do that, then we can determine the num+er
of cells required, the resource load on each cell, and the staUng needed to
su//ort the cell.K
J-rom there we could de2ne our quantitati0e and qualitati0e e"it criteria
for each of the cells for the im/lementation audit,K declared Heather.
J$, then we should ha0e enough information to generate the +loc( la,out,K
said !ichard.
J-rom that /oint we can +egin considering the im/lementation logic,
de0elo/ an, +usiness case Fusti2cation required, and generate an o0erall
organiIation
conce/t, as we will ha0e a framewor( for the factor,,K said Gose/h.
JI li(e it,K said !o+ert. J!ecogniIe that, although some of these items can
+e done in /arallel, the 2rst few are reall, de/endent items and should +e
accom/lished 2rst. *oes an,one ha0e questionsR Then lets get started. I want
Heather and arlXK
%"t"re State 1esign
7:7
$, the end of the 2rst wee(, the /roFect team had com/leted all items u/
to and including the creation of a +loc( la,out C-igures 76.7 to 76.6D. As the,
a//roached the second wee(, a signi2cant amount of discussion ensued
around the im/lementation sequence and generation of an organiIation
conce/t.
;igure 7=/7 Product 4emand Be$a(ior
;igure 7=/: ption Selection Matrix
Z
7
3
5
6
;
?
<
@
4esign &riteria
Su//ort !egal, Inc., world:class
manufacturing 0ision
Su//ort runner, re/eater,
stranger strateg,
-acilitate lin(ages to customer
Su//ort sim/le materials Low
Increase ca/acit, Le"i+ilit,
UtiliIe wor(:cell a//roach
!educe non:0alue:added
s/ace
Pro0ide documented wor(
instructions
6.@
6.<
6.@
6.@
6.5
6.5
6.5
6.;
4.@
3.5
4.@
4.@
7.6
3.3
4.<
5.@
6.@
5.7
6.4
5.?
6.5
6.5
6.5
6.;
&riteria *eig$t
Fption 7G
;unctional 'ayout
Fption <G
By Product
Fption :G
By Product -it$
Stranger Area
=/?
=/6
=/A
=/?
=/<
=/<
=/<
=/5
7::
JXI donPt +elie0e we should start in the shi//ing area. I (now we are
ha0ing signi2cant through/ut loss in the /ress area due to un/lanned down
time on equi/ment,K declared arl. JI (now if we start there 2rst, we can
continue to gain more short:term +ene2ts.K
JI hear what ,ou are sa,ing, +ut if we selected the customer cell o/tion
Z3 for three of our assem+l, cells, then I thin( that is where we should +egin
in order to achie0e our o+Fecti0e of customer res/onsi0eness,K stated Ste0e.
JHh, ,ou Fust donPt want to deal with the 0endor deli0er, issues that would
arise if we started in the /ress area 2rst,K arl uttered sarcasticall,.
JThatPs not trueY )e found that our customers for housing and +earing
/roducts are most unha//, with our res/onsi0eness. )e also found that /art
of the reason it ta(es so long is the fact that com/leted /arts sit in /ac(aging
and shi//ing for 5 to 6 da,s +efore going out the door. If we can reduce that
time to Iero +, doing the /ac(aging right in the assem+l, area and sending
the /roduct directl, to shi//ing, we could most assuredl, meet our customersP
e"/ectations of ne"t:da, deli0er, on housing and +earing /roducts,K
declared Ste0e.
JH(a,, o(a,, settle down,K said !o+ert. JLetPs go +ac( to the reason wh,
we are doing lean in the 2rst /lace. )e ha0e had a customer lea0e the +usiness
due to lac( of res/onsi0eness. $, losing that 0olume, we ha0e /laced oursel0es
in a /osition that will erode o/erating /ro2t unless we reduce costs, namel,
;igure 7=/< &ell: Exit &riteria
Nuantitati(e
J Manufacturing lead3time: := $ours
J n3time deli(ery: @@O
J Nuality yield: @?O
Nualitati(e
J 5S $ousekeeping program
J &ell leader and team mem2ers
J &ommunication 2oard
J 4ocumented operating rules
J "raining skills matrix
J Posted performance measures
J *eekly -ork plan
J Sta2le Ban2an replenis$ment systems
%"t"re State 1esign
7:<
heads. )e are not in a sur0i0al mode ,et, +ut it is coming. I donPt thin( we
want to do an,thing that will /lace our su//l, chain at ris(. )e ha0e not
demonstrated we (now how to do lean oursel0esM therefore, we donPt ha0e
much e"/erience to stand on in addressing the current su//lier +ase with
lean requirements that we ha0e not demonstrated oursel0es. If we can continue
to use our su//l, +ase as it is currentl, /erforming and can minimiIe
ris( to the /roFect, I thin( those are im/ortant factors to consider. )e are
not losing mone,, cash Low is /ositi0e, and we are not as(ing to s/end a lot
of mone, to fund the /roFect at this /oint.K
!o+ert continued, J)hat we need is a 0isi+le winner and it needs to focus
on the e"ternal customer. I would agree with Ste0e. )e need to start in
assem+l, and ma(e that area sta+le. Then we can focus on a fa+rication area
that has signi2cant /roduction loss and deli0ers /arts to assem+l, along those
s/eci2c /roduct families and ma(e that sta+le. Then we can lin( the two
together using Nan+an. !ecogniIe that the fa+rication cell ma, 0er, well
ma(e /arts for other areas, too, +ut we can deal with that in detail design
and the transition /lan. )ould this initial sequence ma(e sense to e0er,oneRK
Most e0er,one nodded their heads in consensusM howe0er, full agreement
would ha0e to come later.
;igure 7=/= Before0After Block 'ayout
7:=
J&ow, what a+out this organiIation conce/tRK as(ed !o+ert. JIs the issue
whether we can come u/ with a /ro/osed organiIation for this lean o/eration
or whether we want to show a /ro/osed organiIation for this lean o/erationRK
JI ha0e had a concern for se0eral wee(s now a+out getting /eo/le engaged
in the /rocess,K said Heather. JI ha0e an issue with /u+lishing a /ro/osed
organiIation conce/t without ha0ing tal(ed with the /eo/le who are +eing
as(ed to change in the /rocess. )e ha0e not told them where the, 2t in. )e
ha0e not shown them how the, are going to +e a1ected. )e ha0e not answered
whatPs in it for them if the, /artici/ate in the /rocess. And, ,et, we are creating
a /ro/osed organiIation that ma, show them doing a di1erent Fo+ or show
them without a Fo+ altogether. I am uncomforta+le a+out doing that.K
JLet me tr, to e"/lain the reason wh, we would do this and how it should
+e done,K stated !o+ert. J-irst of all, the organiIation conce/t is to +e shared
at this stage with no one +ut this team and e"ecuti0e management. Second,
the organiIation conce/t is generic in that it /ortra,s what the 0arious roles
and res/onsi+ilities would +e at each le0el and area within the organiIation,
and the staUng num+ers would +e an end:state /roFection +ased on e"/ected
demand le0els and the designed staUng to su//ort the demand C-igure 76.;D.
)e need to understand what staUng le0els are required to su//ort the
+usiness in order to sustain required /ro2t le0els. &o one will lose their Fo+
as a result of the lean manufacturing /rogram. Howe0er, if demand falls o1
and we cannot re:de/lo, em/lo,ees to other 0alue:added or im/ro0ement
initiati0es, then a certain num+er will +e laid o1.K
!o+ert continued, J)e need to let e"ecuti0e management (now what
staUng le0el is required to sustain the lean manufacturing en0ironment and,
if we are currentl, sta1ed hea0,, we need to secure more wor( through
increased sales of e"isting /roducts, new /roducts, or new mar(ets. )e do
this +, arming mar(eting with a com/etiti0e ad0antage in the mar(et /lace,
so we can grow the +usiness. !emem+er, this information is o+0iousl, sensiti0e
and must +e (e/t under control.K
JI understand the need for the organiIation data, +ut when are we /lanning
to share it with the /eo/le +eing a1ectedRK as(ed Heather.
J9ood question,K arl said, as he win(ed at Heather. J)e ha0e +een going
at this for two months now and /eo/le are +eginning to get ner0ous. The,
are as(ing a+out what is going on. )h, the, ha0enPt heard an,thing, and
whether the, are going to li(e this /rogram.K
JHne of the areas we ha0e not focused on ,et is the 2nal /lant communication.
)e ha0e made the o/ening /resentation, we ha0e shown e0er,one the
milestone /lan, the, ha0e seen the /roFect charter, and the, (now when we
are e"/ected to /resent our 2ndings. )e ha0e +een /u+lishing the newsletter
%"t"re State 1esign
7:5
e0er, other wee(, and we ha0e +een res/onding to the issue +o" in order to
address indi0idual concerns as we go along,K stated !o+ert.
J)hat issue +o"RK as(ed Gose/h.
JThe one $rian told them would +e /ut in /lace and res/onded to on a
regular +asis.K
JHa0e we +een (ee/ing u/ with the em/lo,ee issues +o"RK as(ed !o+ert.
.0er,one loo(ed at each other. The, had forgotten to assign res/onsi+ilit,
for the issue +o". !ichard ran out to the Loor and found the +o" stu1ed full
of questions that had not +een res/onded to since da, one. He immediatel,
em/tied the +o" and +rought the stac( of /a/er into the grou/. The team
was dum+founded and immediatel, +egan cataloging the issues/suggestions
and documenting res/onses to the questions. $, a+out 74B44 that night the,
had a written res/onse to all the issues and suggestions and had them /osted
in multi/le locations on the sho/ Loor. In addition, the, di0ided u/ the sho/
and made /lans to 0isit the sho/ Loor the ne"t da, and tal( directl, with the
/eo/le and a/ologiIe for the /roFect teamPs mismanagement of the /rocess.
The ne"t morning, when the team 0isited the sho/ Loor, the maForit, of
them were greeted rather coldl, when the, inquired a+out the su+Fect. The,
were treated to such mutterings as J/rima donna,K Jout of touch,K Ji0or,
;igure 7=/5 rgani!ation &oncept
7:>
tower,K Jnot team /la,ers.K It too( the team a+out three hours to go around
and smooth o0er relations with those em/lo,ees most /otentiall, a1ected +,
the change initiati0e. After their encounter on the sho/ Loor, !o+ert gathered
the troo/s and re:o/ened the discussion a+out communication and the conce/t
of res/onsi+ilit,, accounta+ilit,, and authorit, C!AAD. JAs we tal(ed
a+out during the 2rst da,s of the /roFect, when ,ou set u/ /roFect deli0era+les
and ownershi/, !AA
!"st
+e esta+lished +, name for each deli0era+le in the
/roFect. If e0er,+od, has res/onsi+ilit,, then no+od, has res/onsi+ilit,. I
+elie0e we ha0e learned a 0alua+le lesson a+out clearl, stating accounta+ilit,,K
said !o+ert.
J&ow, letPs tal( a+out this communication /lan to +e de0elo/ed,K !o+ert
continued. Jontained in that /lan is to +e a stor, line that answers some
0er, s/eci2c questionsB C7D )h, are we changingR C3D )hat are we changingR
C5D )here are we nowR C6D )hatPs in it for meR At this /oint in the /roFect,
we cannot answer these questions. )e are getting closer to +eing a+le to
answer these questions, +ut we are not there ,et. Howe0er, +, the end of this
/hase, we will (now these answers and will /resent them in the /lant:wide
communication that is targeted at the end of this /hase.K
J*oes it ma(e sense to wait until we are three months into the /roFect
+efore we engage the /eo/le with this issueRK inquired Heather.
JI thin( it is a matter of (ee/ing with each /ersonPs role for the /roFect,K
said Ste0e. JThin( a+out it. )e ha0e +rought the /rocess owners in e0er,
ste/ of the wa, as we ha0e gone through each /hase of the /roFect. )e ha0e
gotten their in/ut and +u,:in on the 0alidit, of the data and not made
changes without their concurrence. )e ha0e not made an, changes to the
o/erational le0el ,et and wonPt until we +egin im/lementation with the
NaiIen e0ents. Hur sho/Loor o/erators ha0e not +een a1ected, and when
the, are, the, will +e designing their own wor( areas. )e will ha0e done
some of the u/:front anal,sis and ma, ha0e changed what /arts are made
where, +ut the, will +e in0ol0ed e0er, ste/ of the wa, when changes are made
in their areas on the sho/ Loor.K
JI hear what ,ou are sa,ing. I Fust want to ma(e sure we donPt lose sight
of the /eo/le, +ecause I +elie0e their acce/tance or reFection of this /roFect
could ha0e a maFor im/act on whether we are successful or not,K stated
Heather.
All the /eo/le in the room nodded their heads in agreement.
J9ood, now itPs time to +egin ste/ two E detail design,K said !o+ert.
JThe deli0era+les from this e1ort will feed directl, to the im/lementation
teams for the NaiIen e0ent. -or each of the cells, we will +e generating a ta(t
time, cell wor(load, equi/ment requirements, estimated resources, assigned
%"t"re State 1esign
7:6
/roduct mi", SIPH, cell design guidelines, and /otential measures. This
e1ort will sa0e us a tremendous amount of time during im/lementation.
*oes an,one ha0e a suggestion as to the +est wa, to get through thisR )e
currentl, ha0e identi2ed nine assem+l,, si" fa+rication, and three ser0ice cells
for a total of 7@ manufacturing cells.K
JI would recommend we s/lit the team +etween assem+l, and the rest,K
suggested arl. JI could lead the assem+l, team and !ichard could ta(e
fa+rication and ser0ice, since we gathered the data from those areas initiall,.K
JThat wor(s for me,K said !ichard.
JThatPs 2ne with me, as long as we are 2nished in two wee(s,K Paula said,
as she nudged Gose/h in the arm. The team +urst into laughter.
$ecause there were no o+Fections, the teams were o1 and running. The,
Fointl, created some of the tem/lates, so the information was /resented in a
uniform manner. The, ca/tured all the demand data in order toB
7. *e0elo/ a designed dail, /roduction rate for the ta(t time calculation.
3. 9enerate the dail, /roduct:mi" schedule required for the cells.
-rom there, the, generated a SIPH /rocess ma/ for each cell so that all
the /art num+ers for each cell had an identi2ed su//lier/customer and an,
s/ecial material handling or /rocessing requirements could +e identi2ed.
Hnce the, had the required ste/s in the /rocess documented, the teams
ca/tured the current wor( content for each o/eration for each /art num+er.
This allowed them to calculate ta(t time, rough out the equi/ment loads,
and to /roFect /otential staUng requirements for each of the cells C-igures
76.? to 76.=D.
In addition to conducting a /h,sical Low data anal,sis for the cells, the
teams de0elo/ed design guidelines for each cell, de2nitions for the /otential
measures at the cell le0el, and a /otential organiIation conce/t at the cell
le0el. The team s/ent e0er, +it of the ne"t two wee(s designing, calculating,
discussing, and de+ating the design of each of the cells. As the end of the
second wee( drew to a close, the /roFect team was +eginning to feel /rett,
good a+out what the, had de0elo/ed. An
es)rit &e cor)s
was +eginning to set
in. The, were +ecoming of one mind a+out the /roFect and generating real
e"citement a+out the u/coming im/lementation.
Hn -rida,, Hcto+er 7;, !o+ert +egan shifting the teamPs focus awa, from
the 0er, detailed, tactical le0el to a +roader, more strategic le0el. He told them,
J)e need to s/end the last two da,s de0elo/ing the transition strateg, and
im/lementation /lan for the /rogram. The transition strateg, should address
how we are going to im/lement the /rogram without shutting down the
7:?
+usiness. It should answer whether or not we are going to +uild /roduct ahead
of schedule in order to mo0e equi/ment and +u1er customer demand. Are
we mo0ing on the wee(endR )ill we utiliIe the NaiIen a//roachR )ill we use
/ush:and:/ull scheduling methodolog, in common resource areas for some
of the /arts or turn o0er the whole logistics s,stem at one timeR How will we
locate, identif,, count, and trac( in0entor, during the relocationR How do we
handle our initial e"cess in0entor, outside the Nan+an s,stemR In addition to
the transition strateg,, the im/lementation /lan needs to +e documented. It
needs to identif, the /ilot cell, which /roduction cells go second and third,
and which /roduct grou/s we are focusing on 2rst, second, and third, etc.K
CSee -igure 76.74.D
As the /roFect team wor(ed fe0erishl, to com/lete the tas( +, mid:wee(,
!o+ert was /re/aring the e"ecuti0e management team for the 2nal de+rie2ng
on -rida,. He ga0e them a /re0iew of what was coming and as(ed if there
was an,thing the, could thin( of that was of concern that the team should
loo( into +efore the meeting. .0er, manager said the, were quite /leased so
far with the /lanning e1ort, and the, were 0er, an"ious to +egin the
im/lementation
/hase after 73 wee(s of /lanning and anal,sis.
;igure 7=/> Product 4emand Analysis
;igure 7=/6 4esigned "akt "ime

%"t"re State 1esign

7:@
$, the time -rida,, Hcto+er 33, rolled around, the /roFect team had their
transition strateg, identi2ed, the, had their im/lementation /lan documented,
and the, had a /lant:wide communication /resentation all /re/ared
;igure 7=/? *ork &ontent Matrix
;igure 7=/@ +olume Matrix
;igure 7=/7A Implementation Met$odology
57?
34<
34<
73?
@5
@5
3=3
=44
53.6W
57?
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736
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=<5
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5373
7<A
for e"ecuti0e management a//ro0al. The meeting with management lasted
a+out three hours, including lunch, and at the conclusion of the questionand:
answer session, $rian as(ed that the team +e dismissed for an hour while
the !egal e"ecuti0e management team contem/lated the /ro/osal.
)hile the team was waiting in the war room, Heather as(ed, J)h, do
,ou su//ose the, as(ed us to lea0eRK
JI donPt (now,K said Ste0e.
JMa,+e the, wanted to tal( a+out us +ehind our +ac(s,K said arl, Fo(ingl,.
JI thin( the, Fust want to ma(e us sweat,K said !ichard.
JI imagine the, Fust wanted to feel comforta+le as a grou/ that this is the
right direction and the, want to +e a+le to ha0e some free de+ate among
themsel0es, unencum+ered +, s/ectators,K said !o+ert.
After a+out 6; minutes, the, were in0ited to return to the conference
room. $rian welcomed them +ac( and congratulated them on a well:de0elo/ed
and thought:through lean manufacturing /ro/osal for !egal. His ne"t
comment was, JSo, when can ,ou startRK
7<7
75
4eployment
, the time @B44 a.m. )ednesda, morning, Hcto+er 3<, arri0ed, the
team mem+ers had alread, +een assem+led and were +usil, ma(ing
2nal arrangements for $rianPs /resentation to the entire em/lo,ee
/o/ulation of !egal, Inc. It was designed to +e a one:hour /resentation with
a half hour for questions and answers. The team was e"tremel, e"cited and
at the same time ner0ous a+out how the lean manufacturing message would
+e recei0ed +, the rest of the em/lo,ees.
Heather was most concerned a+out how the em/lo,ees who would +e
most a1ected +, the /rocess changes would feel a+out the /rogram. She (new
that no one would lose his or her Fo+ as a result of the lean manufacturing
/rogram. The, ma, +e doing di1erent Fo+s or conducting wor( in a di1erent
manner than the, were used to doing, +ut the, would not lose Fo+s as a result
of the continuous im/ro0ement e1orts. She (new the, had alread, identi2ed
a list of e"isting im/ro0ement initiati0es, which were not getting done due
to a lac( of resources. She (new a NaiIen /ool was +eing esta+lished for
/ersonnel who were released from current /roduction areas so that the,
could +e utiliIed on future NaiIen e0ents. She realiIed that !egal sorel,
needed /roduction engineers and technicians to wor( on the sho/ Loor and
with the su//lier +ase to address lean im/ro0ement o//ortunities. .0en
though she (new a+out all the outlets that had +een /ut in /lace, she was
still concerned as to how the /eo/le would handle the news. She went u/ to
arl, lightl, touched his forearm, and as(ed, Jarl, how do ,ou thin( the
/eo/le are going to recei0e the /resentationRK
arl turned to Heather and re/lied, JI wouldnPt +e too concerned a+out
it. )e ha0e set u/ se0eral new o//ortunities if their current /ositions are
+eing eliminated, and we ha0e assem+led a 0er, com/elling stor, as to wh,
the +usiness needs to change. )e ha0e shown where the, can 2t into the new
B
7<:
o/eration. )e ha0e demonstrated that when /eo/le are wor(ing on non0alue:
added acti0ities the, are wasting 0alua+le resource time and energ,.
)e ha0e made it clear that it is the /rocesses the, are doing that are non0alue:
added, and not the indi0idual /eo/le themsel0es who are non:0alueadded.
Unfortunatel,, I +elie0e what !o+ert told us is true, that 74W of the
em/lo,ees will em+race the change, @4W will go with the Low, and 74W will
2ght it all the wa,. I also thin( we need to address those 2ghters as earl, in
the /rocess as /ossi+le so the, do not ruin it for the +alance of the organiIation.
)e will need to let them (now that we are going in this new direction,
and if the, donPt want to change, we donPt thin( the, are going to +e ha//,
wor(ing here in the future. )e need to inform them that we will +e glad to
hel/ them 2nd a new /osition some/lace else. Ho/efull, at $lue IronYK
Heather ga0e arl a wide:e,ed loo(. He Fust ga0e her a win( and wal(ed
+ac( to the war room.
$, 74B44 a.m., the stage was set, the /odium equi//ed, the slides loaded,
and the crowd gathered for a town hall meeting. The management sta1 and
/roFect team wal(ed in and sat in the front of the room to answer questions
from the audience. $rianPs /resentation was direct, 0er, com/elling, and
sincerel, honest a+out the current situation and future direction for the
com/an,. He tal(ed a+out the /erformance ga/ +etween !egal toda, and the
+enchmar( of world:class manufacturers. He descri+ed the o//ortunities for
im/ro0ement that were identi2ed +, the /roFect team. He e"/lained the
im/lementation a//roach and the timing as to which areas were to +e
addressed 2rst, second, and third. He showed where !egal stood in the e,es
of its customers relati0e to com/etiti0e criteria and +, com/arison to the
com/etition. He reiterated that no Fo+s would +e lost due to the im/ro0ement
/rogram, +ut did e"/lain that man, would lose their Fo+s if there was a
reduction in demand for !egalPs current and future /roduct +ase. $rian
showed the list of unresourced im/ro0ement initiati0es that were a0aila+le
for those who were released from their current acti0ities within the o/eration.
He ended the /resentation with a than( ,ou to the /roFect team for their
e1orts o0er the /re0ious three months and as(ed for the full su//ort of e0er,
em/lo,ee at !egal during im/lementation.
Although, most of the audience was quiet at 2rst and did not 0olunteer
an, questions, the, did not a//ear to +e in shoc(, either. This was /rimaril,
due to the fact that the team had (e/t man, of the (e,, informal leaders on
the com/an, gra/e0ine informed as to what was ha//ening. The team had
also (e/t se0eral inLuential /eo/le in0ol0ed during the anal,sis, /lanning, and
design /hases in order to 0alidate data and gain concurrence on direction. The
questions, which e0entuall, came, were relati0el, tame and focused /rimaril,
1e)loy!ent
7<<
on understanding how indi0idual in/ut would +e incor/orated into their wor(
areas. $rianPs res/onse was that as each area was scheduled to come on line,
indi0idual in/uts would +e addressed during that /hase of the im/lementation.
)hen the /roFect team adFourned to the war room, the, were an"ious to
+egin this 2nal /hase of the /roFect. The, were e"cited to +egin seeing acti0it,
relati0e to all their /lanning e1orts. $, the time !o+ert made it +ac( to the
war room, he was /um/ed.
JH(a,,K he said. JIt is time for us to mo+iliIe oursel0es and (ic( o1 our
/ilot cell im/lementation. Here is how I +elie0e we should /roceed. -irst of
all, I want to +ring in the selected cell leader and his team of o/erators after
lunch and I want e0er,one to introduce themsel0es to the cell team mem+ers.
Second, I want to congratulate them on +eing selected for the /ilot and let
them (now that it is a good thing and not a +ad thing that the, ha0e +een
selected. Third, I want to +rief the cell team on what anal,sis has +een done
to this /oint in their area. -ourth, I want to inform them that the, ha0e +een
scheduled for a NaiIen e0ent +eginning ne"t Monda,. And, 2nall,, I want to
tal( through with them the NaiIen e0ent schedule and lean manufacturing
/rinci/les format.K
J*onPt ,ou thin( that that is a lot of information for them to digest in
such a short /eriod of timeRK as(ed !ichard. JAfter all, the, onl, recei0ed
their 2rst introduction to lean manufacturing a cou/le of hours ago.K
JI donPt thin( so,K said Paula. JI thin( these /eo/le ha0e +een an"ious to
hear information from us for the last three months and the, would +e glad
to hear as much as we can tell them.K
JI agree with Paula,K Gose/h chimed in. JAfter all, we had to a+sor+ a lot
of information in a short /eriod of time. I thin( it is time we share the fun
with someone else.K
The rest of the /roFect team nodded in agreement. The, felt the time had
come to immerse the rest of this organiIation in the world of lean manufacturing.
After lunch, the cell team entered the war room somewhat a//rehensi0el,.
!o+ert +egan +, introducing himself and as(ing them to ta(e a seat at the
ta+le. The /roFect team mem+ers introduced themsel0es, e"/lained their roles
on the /roFect, and congratulated the cell team mem+ers for +eing selected
as the /ilot cell. After setting the cell team at ease, Ste0e +egan the de+rie2ng
+, e"/laining the lean assessment results. He then wal(ed them through the
o0erall /lant material and information Low ma/. He then /roceeded to
descri+e the /roduction loss Pareto diagram and waste issues/element matri"
for their area. He 2nished +, descri+ing the conce/t design for the /lant and
showed where their /roduction area 2t into the o0erall la,out.
7<=
arl then stood and once again e"/lained the im/lementation methodolog,
to the team. He e"/lained how there would +e a 3:month stage in
which the +aseline and foundation of the cell would +e esta+lished. *uring
this /eriod of time, the team would +e e"/ected to im/lement se0eral
quanti2a+le
and quali2a+le as/ects of lean manufacturing within their cell. The,
would +e gi0en time for the /rocess to sta+iliIe, a//ro"imatel, ? wee(s. At
the end of those ? wee(s, the cell would +e audited. If it /assed the audit,
a//ro0al would +e gi0en to ad0ance to stage two of im/lementation. The
same criteria would still a//l, for +oth stage two and then stage three. As
lessons were learned +, the cell team, the, would +e noted and used for
insight during the de/lo,ment of su+sequent /roduction cells.
J)hat are these stages ,ou are tal(ing a+outRK as(ed Ga(e, the teamPs cell
leader.
JI am glad ,ou as(ed that question Ga(e, +ecause I am a+out to show
,ou,K said arl, as he hit the +utton for the ne"t slide.
JThe stage one /rinci/les are focused on designing a solid foundation for
the cell. The, are utiliIed li(e /rerequisites +efore mo0ing onto those items
in stage two. The, reall, set the stage, so to s/ea(.K CSee -igure 7;.7.D
JThe 2rst thing we ha0e to do is esta+lish ta(t time,K stated !ichard.
J.0er,thing starts with ta(t time, which is nothing more than the designed
dail, /roduction rate determined for the cell. )e are a+le to determine this
from our customerPs /roduct demand +eha0ior and the amount of 0ariation
;igure 75/7 'ean Manufacturing Principles
1e)loy!ent
7<5
we ha0e in that /attern. -rom there, we need to esta+lish our standard wor(.
)e accom/lish this through a series of ste/sB C7D ca/ture the current /rocess
Low, identif, 0alue: and non:0alued:added o/erations, and time each of the
ste/s in the /rocessM C3D eliminate or reduce the amount of non:0alued ste/s
or waste in the /rocess and lin( the 0alue:added /rocesses togetherM C5D
+alance the wor( load of each o/erator to the required ta(t timeM and C6D
document this as the standard method, sequence, and assignment of wor(
for o/erators in the cell.K
JHnce we ha0e an agreed u/on a standard wor( /rocess, we need to
identif, the com/onent /art Nan+an requirements and the new rules, roles,
and res/onsi+ilities for the cell team mem+ers,K e"/lained Heather. )e need
to determine the /arts and quantities and how the, are going to +e re/lenished
to the cell. In addition, we will documentB C7D the new o/erating rules
for the cell so e0er,one (nows how it is designed to function, C3D the roles
each /erson has as a team mem+er, and C5D the res/onsi+ilities each role is
accounta+le to /erform.K
JHnce we ha0e those /rinci/les, we can create the gra/hical wor( instructions
for the cell +ased on the new standard wor(,K said arl. J)e can then
decide what scheduling /attern we want to use to le0el /roduction through
the cell. )e loo( at high: and low:0olume demand /atterns, setu/ times, and
/rocess qualit, ,ields to determine the /roduction le0el. K
$, this time, !o+ert was +eginning to grin from ear to ear.
J)ith those /rinci/les in /lace, we can now demonstrate the one:/iece
Low methodolog, and intra:cell /ull conce/t,K said Ste0e. JHne:/iece Low
means that we no longer +uild in quantities of da,s or wee(s at a time. )e
+uild one /iece at a time and /ass it onto the ne"t o/eration without waiting
for the rest of the order to com/lete.K
J-inall, we esta+lish 0isual controls and ;S, or house(ee/ing, criteria for
the cell area,K said Paula. JThe 0isual controls consist of /erformance measures
on the sho/ Loor, for the sho/ Loor, created +, the sho/ Loor, maintained
+, the sho/ Loor, and owned +, the sho/ Loor. Hther 0isual controls
include well:mar(ed incoming and outgoing areas, signs descri+ing the cell,
and cell +oundaries /ainted on the Loor. The ;S conce/t is a well:organiIed
and structured wa, to loo( at house(ee/ing. .0er,thing has a /lace and
e0er,thing is in its /lace. .0er,thing that +elongs is la+eled, and the area is
cleaned on an e0er,da, +asis.K
!o+ert was s/eechless. His /roFect team had /ic(ed u/ on all the main
conce/ts from stage one, ta(en them to heart, and was now full, engaged in
this new world of lean manufacturing. The, had come a long wa, in the last
three months, and he was 0er, /roud of the transition the, had made. He
7<>
stood when Paula was 2nished and +egan to descri+e to the cell team the
NaiIen e0ent schedule C-igure 7;.3D. JThe NaiIen e0ent schedule ,ou now
see +efore ,ou will +egin on Monda,. The wa, it is designed to wor( is as
followsB
J*a, HneB In the morning, the cell team will recei0e 3 hours of training
on cell design and standard wor(. This training will /re/are ,our team for
the wor( ,ou will +egin on Monda,, which will +e focused on /lanning the
wee(, assigning res/onsi+ilities, re0iewing the detail design anal,sis, and
generating a /reliminar, la,out. At the end of the da,, the team will re0iew
their status.
J*a, TwoB The cell team will recei0e training on material /ull and one/iece
Low. )e are tr,ing to /ro0ide the training as ,ou need it and can a//l,
it. In addition, we are tr,ing to (ee/ it concise for ease of retention. Hn
Tuesda,, the 2nal la,out will +e designed, communicated to maintenance,
and rearranged. Again, at the end of the da,, the team will re0iew their status.
J*a, ThreeB ell team training continues on Nan+an requirements and
de2ning cell team rules, roles, and res/onsi+ilities. Hn )ednesda,, the cell
team will +e doing man, acti0ities in /arallel. 'ou will +e demonstrating the
material and o/erator Low for the new cell. 'ou will +e im/lementing the
;igure 75/: Bai!en E(ent
1e)loy!ent
7<6
one:/iece Low /rinci/le. 'ou will +e esta+lishing the Nan+an methodolog,
and disci/line for the re/lenishment /rocess. 'ou will +e documenting the
o/erating rules, identif,ing the di1erent cell roles, and descri+ing the
res/onsi+ilities
for each of the new roles. In addition, ,ou will ha0e selected the cell
Nan+an containers and +egun to /roduce /ilot /roduction. Again, at the end
of the da,, the team will u/date their status.
J*a, -ourB The cell team will recei0e training on le0el /roduction scheduling
and wor( instructions. 'ou will 2ll the selected Nan+an containers,
generate and descri+e how to maintain the gra/hic wor( instructions for the
new /rocess, and determine the le0el /roduction scheduling /attern for their
cell. Again, at the end of the da,, the team will re0iew their /rogress.
J*a, -i0eB The cell team will recei0e 2nal training on ;S and 0isual
controls. The team will use the ;S conce/t for house(ee/ing within the new
cell, de2ne the criteria for good house(ee/ing, and esta+lish the manner of
audit for house(ee/ing. In addition, ,ou will determine, design, de0elo/, and
de/lo, three to 20e critical /erformance measures for the cell. Two of the
recommended measures would +e some t,/e of scheduled out/ut adherence
and a measure related to /rocess qualit,. Again, at the end of the da,, the
team will u/date their status.
J$, the end of the wee(, the team should ha0e a functioning cell. It wonPt
+e /erfect and it ma, not e0en +e e"actl, the wa, ,ou reall, want itM therefore,
the following wee( is a0aila+le to ma(e changes and adFustments to get it the
wa, ,ou want it. $, the end of the second wee(, we should /rett, much ha0e
what we want and it is time to let the cell sta+iliIe. There will +e agreedu/on
/erformance targets for the cell and an e"it criteria esta+lished in order
to /erform an audit. After a+out ? wee(s, the cell should +e /erforming
consistentl, and ha0e satis2ed the e"it criteria. It is at this /oint that we will
discuss mo0ing on into stage two. Are there an, questions at this timeRK as(ed
!o+ert.
The cell team mem+ers loo(ed on with raised e,e+rows. The, were not
quite sure what to ma(e of all this information, let alone how all this was
going to +e accom/lished in 20e da,s. !ealiIing the grou/ was /ro+a+l, in
shoc(, !o+ert assured them, JI (now this is a lot of material, +ut the /roFect
team felt it was im/ortant to /ro0ide ,ou with a good o0er0iew +efore we
Fust ste//ed into it ne"t wee(. $elie0e me, it will all ma(e more sense as we
mo0e into ne"t wee(.K
As the following wee( /rogressed, Fust as !o+ert said, it all started to ma(e
sense. The /roFect team +egan each da, with a sni//et 0ersion of the training
to/ic for the da,. The, trac(ed themsel0es against the /roFect /lan the, had
de0elo/ed on Monda,. The /roFect team had sa0ed itself a lot of time +,
7<?
doing a thorough Fo+ during the detail design /hase +, determining the
demand /atterns, ta(t time, wor( content times, equi/ment loads, etc. All
this /re:wor( made getting into the detail la,out discussions with the cell
teams much easier. The fact that the maintenance resources were on stand+,
to rearrange equi/ment at the end of the second da, and actuall, got all the
equi/ment mo0ed +, the time the team arri0ed on )ednesda, morning +lew
the cell team awa,. $, the end of the da, Thursda,, the, were actuall,
/roducing at half rate and demonstrating the one:/iece Low conce/t. $, this
time, se0eral other !egal em/lo,ees were +ecoming interested in what was
ha//ening at this new cell area, and +, the end of the da, -rida,, when all
the equi/ment had +een /ainted, Loors had +een mar(ed and swe/t, and a
communication +oard was 0isi+le, the, wanted to (now when someone was
going to do their area.
As the /roFect team assem+led in the war room at the end of the long
wee(, $rian /o//ed his head in and told the team the, had done an outstanding
Fo+. He had to admit to them, JI wasnPt quite sure Fust how much
,ou reall, were going to accom/lish, +ut I must confess ,ou ha0e sur/assed
m, wildest e"/ectations. ongratulationsY Go+ well done.K
Gust as $rain was lea0ing, !o+ert arri0ed to tell the team how /roud he
was of all the, had accom/lished. J'ou, as a team, ha0e come together and
learned a great deal from each other. 'ou ha0e acquired (nowledge a+out the
current o/eration, ,ou ha0e a//lied what ,ou learned a+out lean manufacturing,
and now ,ou are transferring that (nowledge to others in the organiIation.
That is where true com/etiti0e ad0antage comes from. It doesnPt
come from +u,ing a new /iece of equi/ment. It doesnPt come from rearranging
the furniture. It doesnPt come from /utting in a Nan+an s,stem. It doesnPt
come from hiring an e"/ert in lean manufacturing. It comes from the
strengthening of ,our organiIationPs a+ilit, to res/ond to customer needs
through e0er,one within the o/eration.
JIts a+out equi//ing e0er,one with the (nowledge of how to +e lean and
a+out e0er,one wor(ing to im/ro0e the o/eration a little +it e0er, da,. 'ou
all ha0e done e"tremel, well u/ to this /oint, +ut Fust to this /oint.
Im/lementation
is where the ru++er meets the road, and ,ou ha0e onl, Fust +egun.
!emem+er, this is where we start to rea/ the +ene2ts for all our e1orts. &ow,
go home. 'ou deser0e this wee(end, +ut +e read, to hit it again on Monda,.K
7<@
7>
"$e Results
s the following wee(s and months /assed, the lean manufacturing
/rogram +egan to s/read across the entire o/eration. In a matter of
? months, the, were a+le to +ring eight cells u/ through stage one,
and si" of those cells also quali2ed through stage two. &one of the cells
attem/ted stage three. It was felt that stage three would +e addressed when
all the fa+rication, assem+l,, and ser0ice cells were functioning at a stage one
le0el. If the, (e/t to the original im/lementation schedule, all 7; cells would
+e functioning at stage two within one ,ear of their initial de/lo,ment.
&ot onl, were the cells satisf,ing the e"it criteria for qualitati0e as/ects
through 0isi+le e0idence of SM.*, TPM, ;S, standard wor(, Nan+an, etc., +ut
the, were also a1ecting the quantitati0e criteria through greatl, im/ro0ed
o/erational /erformance. The, were a//roaching +etween 3; and 5; turns
on wor( in /rocessM on:time deli0er, out/ut was consistentl, at =@W e0er,
da,M and the, achie0ed /redicta+le manufacturing lead:times for /roducts
that were measured in hours not wee(s. The in:/rocess qualit, ,ields were
relia+l, at the ==W le0el, and la+or /roducti0it, had increased a+out 7;W
across the +oard without changing an, of the current manufacturing /rocesses.
These changes in /erformance had generated tremendous enthusiasm
among the em/lo,ees. .0er,one could now 0isi+l, see the status of their areas.
The, (new if the, were on /lan for the da, or if /erformance was sli//ing.
The, were a+le to identif, /ro+lems on the communication +oard as the,
were ha//ening and ma(e issues 0isi+le. The teams were re0iewing their
o/erational /ro+lems with management on a dail, +asis for timel, correcti0e
action.
It was the culmination of all these indi0idual /rinci/les that allowed !egal,
Inc., to +egin addressing their identi2ed com/etiti0e criteria and to align
with what their customers 0alued. The, +egan to e"/loit their com/etiti0e
A
7=A
wea/ons in the mar(et/lace and challenge the com/etition, which in turn
was +eing reLected +, some changes in their +ottom line and the securing
of additional wor( that was not /lanned for the ,ear. urrent quarter sales
were shar/l, u/ o0er /lan, /rimaril, due to the securing of a new order for
high:/erformance /istons from #iscon om/an,. !egal went head to head
with $lue Iron and won a 3:,ear contract +ased on their res/onsi0e leadtime
and relia+le qualit, /erformance.
These successes would ha0e +een short li0ed and unsustaina+le if the /roFect
team had not realiIed how im/ortant it was to institutionaliIe the new wa,s
of wor(ing, there+, ma(ing it e"tremel, diUcult for the organiIation to sli/
+ac( into the old wa, of doing +usiness. The, (new that +, standardiIing the
wor( and ma(ing the o/erating /rocesses e"actl, the same, the, would remo0e
a source of 0ariation from the /rocess and enhance out/ut qualit,. Then, no
matter who did the Fo+, +, measuring the /rocess /erformance to a standard
for time and out/ut it was 0er, eas, to recogniIe a+normalities as the,
occurred. This allowed for greater control on the /rocess out/ut and timel,
feed+ac( for correcti0e action. -inall,, the, were astute enough to recogniIe
that rewards for the multi/le s(ills attained +, indi0iduals to su//ort the
Le"i+le wor( en0ironment were crucial, as were rewards for consistentl,
achie0ing and +eating /erformance targets. The, o1ered increased /a, for
increased s(ill and rewarded cell teams with /erformance +onuses on a
monthl, +asis if the, consistentl, achie0ed target and/or im/ro0ed the /rocess.
Instituting these changes allowed !egal to +ecome a world:class manufacturing
entit, o0er the ne"t cou/le of ,ears. The, had the tenacit, to sta,
the course and ride out the short:term /ains for long:term gains. Hnce the,
had their sho/ Loor under control, !egal had a wor(ing model for su//liers
to 0iew so the, could +egin to de/lo, similar methodologies within their
own factories. Man, of !egalPs (e, customer accounts were a+le to see a
signi2cant change within the o/eration and got a glim/se of where the
com/an, was going. This /ee( into the future im/ressed these (e, accounts
and hel/ed secure additional new /roduct orders in the future.
-or !egal Inc.B
A
onsistent
lea&ershi)
/ro0ided the direction and resources needed.
A
8nvolve!ent
of the entire !egal organiIation allowed them to succeed.
A
A lean
roa& !a)
hel/ed them sta, the course through roc(, terrain.
A
A /assionate
&esire
o0ercame all o+stacles along the wa,.
'ou, too, can +e successful on ,our /ath to +ecoming world class, Fust
li(e !egal. It is all Fust a matter of following the right ste/s.
I+
&ASE S".4IES
; 'EA1
MA1.;A&".RI1G
PRGRAMS
A14 PRME&"S
Part I# shows how si" di1erent com/anies de/lo,ed lean manufacturing
within their facilities Cthe names and /laces ha0e +een changed to /rotect
com/etiti0e con2dentialit,D. .ach case addresses a di1erent le0el or as/ect
of a lean im/lementation, +ut the, all follow the same outline in regard to
com/an, +ac(ground, dri0ers for change, the a//roach utiliIed, +ene2ts
achie0ed, and lessons learned. In addition, there are testimonials at the end
of each case that /ro0ide the reader with some insight into the /erce/tions
of em/lo,ees e"/eriencing this changeo0er to a lean en0ironment.
7=<
7>
&ase Study A:
perations
Redesign Program
&ompany Pro)le
ocated in an industrial /ar( within the cit, of GuareI, Me"ico, resides
a manufacturer of uninterru/ted /ower su//lies CUPSD for com/uters.
This manufacturer was /art of the
!a-"iia&ora
s,stem utiliIed +, man,
multinational com/anies as a source of low:cost la+or for /roducts. This
/articular facilit, was one of man, sites owned and o/erated +, a com/an,
called Unit, .lectronics. This /rimar, manufacturing location was contained
within a =4,444:square:foot facilit,, with a total em/lo,ee /o/ulation of
a+out @;4. Their (e, manufacturing /rocesses included the automated and
manual insertion of /rinted circuit +oards CP$sD and wa0e solder o/erations,
as well as manual and automated assem+l,.
Unit, .lectronics mar(eted, designed, manufactured, and deli0ered UPS
s,stems to the com/uter and communications industr, worldwide. The
Unit, .lectronics o/eration was di0ided into se0eral di1erent di0isions. The
di0ision that owned this /articular manufacturing site was Sil0er S,stems
9rou/ CSS9D. SS9 generated a//ro"imatel, a3;4 million in re0enues during
7==@ +, focusing on three maFor /roduct segments E stand+,, line interacti0e,
and online units. The GuareI, Me"ico, o/eration was accounta+le for
/roducing a//ro"imatel, one half of SS9Ps re0enue. The o0erall o/eration
was di0ided among three facilities located in GuareI, Me"icoM Horton Mesa,
T>M and .l Paso, T>.
'
7==
The original facilit, was +uilt when the initial com/an,, -aucet, was in
the low:0olume UPS +usiness. H0er time, the need arose to e"/and into an
adFacent +uilding to su//ort a growing demand for higher and higher /roduction
0olumes. The resulting im/act was an ine1ecti0e factor, Low and
insuUcient doc( s/ace to handle high:0olume UPS /roduction. a/acit,
constraints on equi/ment limited the a+ilit, to satisf, customer deli0er,
requirements and /ro0ide on:time shi/ments. The factor, had to o/erate 36
hours a da,, ? to < da,s a wee(, to meet customer requirements which did
not allow an, time for reco0er, or ma(eu/ /lans should there +e line sto//ages.
Ne, customers were also requiring additional ca/acit, and Le"i+ilit,,
which could not +e met. To remo0e some of the constraints, P$ assem+lies
were outsourced and /lans were made to transfer /roduction to other, higher
cost facilities within the grou/. Automated insertion CAID equi/ment was
running around the cloc( to (ee/ u/ with /roduction, which allowed for
onl, minimum scheduled maintenance. Aside from the factor,, there was a
54,444:square:foot warehouse facilit, in Horton Mesa, T>, which handled
all in+ound and out+ound material shi/ments. In addition, there was a
/eri/heral 75,444:square:foot material staging warehouse in GuareI to handle
the o0erLow of materials due to the ine1ecti0e Low through the /lant.
4ri(ers for &$ange
The o/erational /erformance of this manufacturing site had not +een satisfactor,
for se0eral end:item customers o0er a 5: to =:month /eriod of time.
In &o0em+er 7==<, Unit, .lectronics was /urchased from -aucet and internal
management consultants from the new /arent com/an, were sent to 0isit
the site to conduct an o/erations diagnostic on the .l Paso, Horton, and
GuareI facilities. The result of this diagnostic indicated se0eral issuesB
7. Unit, des/eratel, needed to get control of its demand management
/rocess.
3. The com/an, had a serious deli0er, /erformance /ro+lem C5;W ontime
to customer requested shi/ dateD.
5. In0entor, turns were around 3.@.
6. Su//lier management and de0elo/ment were reall, none"istent.
;. The limited ownershi/ for /roduct /erformance was scattered
throughout the organiIation.
Case St"&y A+ 2)erations Re&esign Progra!
7=5
?. The /lanning and control of material and information Low were
handled through two di1erent M!P s,stems. In addition, se0eral
informal +usiness rules were used to manage wor( /rioritiIation on
the sho/ Loor.
<. A limited num+er of sho/Loor metrics focused onl, on qualit,.
@. Man, informal 2"es were /ut in /lace without institutionaliIing the
im/ro0ements.
In addition, Interma", a /rimar, H.M worth a//ro"imatel, ;4W of Unit,Ps
+usiness, had recentl, come in and rated the qualit, s,stem of Unit, .lectronics
as 0er, /oor E Jone of our worst su//liers.K
)ith these identi2ed dri0ers for change, it is not diUcult to see what
moti0ated Unit, .lectronics to /ursue a new wa, of doing +usiness.
ProCect Background
$ased on the a+o0e 2ndings, an initial im/ro0ement e1ort was launched in
*ecem+er 7==@ and focused on su//l,:chain management. $, -e+ruar,
7===, it +ecame increasingl, o+0ious that signi2cant s,nergies could +e
gained for the +usiness if se0eral ongoing initiati0es could +e com+ined
under one /rogram. $, A/ril 7===, an Jo/erations redesignK /rogram
Cfocusing on lean manufacturing /rinci/lesD was launched which com+ined
a su//l,:chain management /roFect, a strategic /rocurement /roFect, and
a /lant e"/ansion /roFect into one o0erall /rogram.
The Unit, .lectronics Unit, H/erations !edesign CUH!D /rogram was
oUciall, (ic(ed o1 +, selecting a multi:disci/lined team to focus on redesigning
the 0alue stream for the entire o/erations /rocess. This team focused
on two main tas(sB C7D de0elo/ing an o0erall conce/tual design for the new
o/eration, and C3D generating a /roFect im/lementation /lan that signi2cantl,
im/ro0ed the com/an,Ps a+ilit, to satisf, all e"ternal customer and
internal +usiness e"/ectations. Throughout the /roFect, the /roFect team
recei0ed signi2cant training in +oth change management methodologies and
lean manufacturing techniques for o/erations management. In addition to
concentrating on the longer term /ers/ecti0e, short:term actions Cor quic(
hitsD were identi2ed, and im/ro0ements were incor/orated as quic(l, as
/ossi+le during the conce/t design /hase.
7=>
ProCect Scope and 2Cecti(e
Unit, .lectronicsP UH! /rogram addressed the entire o/erations /rocess
from customer forecast and demand management through factor, Loor
management and scheduling to su//lier management and the distri+ution
of 2nished goods. It included their glo+al strategic /rocurement initiati0e
and too( ad0antage of the o//ortunit, to set u/ a Jgreen2eldK o/eration
within a +rand:new facilit, +ased on a +usiness unit a//roach.
The /rimar, /erformance o+Fecti0es were intended to a1ectB
A
C"sto!er re-"este& shi) &ate =CRS1>,
the com/an,Ps /erformance
measured against the date 2rst requested +, the customer when an
order is /laced. This is a measure of the entire /rocess of forecasting,
2nished goods/ser0ice le0el strateg,, and engineering and factor, /erformance.
A
C"sto!er )ro!ise &ate &eviation,
the com/an,Ps /erformance measured
against the 2rst /romise gi0en to a customer when an order is
/laced. The /romise date ma, not equal the !S*.
A
Man"*act"ring &elivery,
a measure of the a+ilit, of the factor, to +uild
and shi/ /roduct on its scheduled date.
A
Man"*act"ring lea&6ti!e,
the length of time from /rocurement of raw
materials to com/letion of 2nished goodsM also, the minimum length
of time from customer order to deli0er, of requested /roduct.
A
S"))lier )er*or!ance,
a measure of a su//lierPs a+ilit, to satisf, deli0er,,
qualit,, ser0ice, and cost e"/ectations.
A
8nventory levels an& t"rns =raw !aterials, work in )rocess, an& Cnishe&
goo&s>,
the annual cost of sales C/ast 5 months annualiIedD di0ided
+, month:end in0entor, le0els.
ProCect Approac$
As was stated earlier, the o0erall a//roach to the UH! /rogram actuall,
e0ol0ed o0er time. The /roFect initiall, +egan with a focus on the Unit,
.lectronics su//l, chain, from the customer to manufacturing /lanning and
control on the sho/ Loor to the deli0er, of 2nished goods to the customer
through warehouse distri+ution. After a few months of wor(ing on the
/roFect, it was determined that a greater amount of le0erage and su+sequent
+ene2t could +e achie0ed through the s,nerg, of se0eral /roFects, so the entire
7=6
/roFect was +roadened to co0er all of o/erations and /laced under one
/rogram management structure. This new sco/e co0ered e0er,thing from
order administration and su//lier interface to manufacturing management
and customer interface.
The o0erall /rogram was s/lit into se0eral indi0idual /roFects, which were
all interconnected 0ia a common /ur/ose through s/eci2call, identi2ed
o+Fecti0es. The /roFects were segregated +, maFor +usiness /rocess to /ro0ide
focus for the indi0idual teams and their assigned o+Fecti0es. .ach /roFect had
an identi2ed leader with assigned team mem+ers. The /roFects were time
/hased so that the team mem+ers who were assigned to initial /roFects could
+e reassigned to later /roFects. $, assigning resources in this manner, Unit,
was a+le to achie0e cross:functional (nowledge transfer through e"/osure
across /roFect teams.
The indi0idual /roFects includedB
7.
Process layo"t+
As/ects dealing with the /h,sical Low, cell design, and
2nal la,out for each of the cells C73D and +usiness units C6D.
3.
Material )lanning an& control+
-ocus on the design and de0elo/ment
of the logistics /rocess for /lanning and controlling the Low of material
through the factor, and warehouse s,stem to the customer
through Nan+an /ull.
5.
2rgani3ation &esign+
HrganiIation redesign and training /rograms
that included the cell team, cell leaders, +usiness unit managers, and
su//ort o/erations through a structured /rocess of assessment and
selection.
6.
%acilities
Cthe new /lantDB onstruction of a +rand:new manufacturing
facilit,.
;.
Tactical )roc"re!ent+
*e/lo,ment of shared .*I with su//liers
through .*I/e:commerce, and reduction of the current su//l, +ase
+, 64W.
?.
Total ac-"isition cost+
9eneration of a glo+al su//l, strateg, and
su//lier de0elo/ment and selection /rocess.
.ach /roFect had its own su+set of o+Fecti0es and assigned deli0era+les, and
each team had to re/ort /rogress to /lan for their /roFect e0er, wee(.
Integration
+etween the /roFect team leaders in regard to what the, were designing
for the new /rocesses was essentialM therefore, communication +etween
teams was a constant acti0it,.
7=?
.0en though each /roFect was managed inde/endentl,, the, all had to
follow the same methodolog, for design, de0elo/ment, and im/lementation.
This methodolog, had se0en distinctl, inde/endent ste/sB
7.
Baseline
would esta+lish a +aseline of current /erformance for the
e"isting /rocesses. This was accom/lished +, ma//ing each of the
critical o/erational /rocesses and gathering (e, /erformance data on
each of those /rocesses.
3.
1esire& state
would esta+lish the desired state for the +usiness. The
team did this +, re0iewing the o/erations diagnostic that was conducted
in *ecem+er of 7==<. The, also /erformed a self:assessment
on (e, +usiness /rocesses to determine where Unit, .lectronics was
/erforming com/ared to what was considered +est /ractice. The,
made site 0isits to other com/anies who were noted for o/erating
with lean /ractices. The e"/ected outcome of this ste/ was for the
/roFect team to recogniIe what was /ossi+le and to learn from the
techniques of others.
5.
Ga) analysis
would recogniIe the ga/ +etween where the, were and
where the, wanted to +e. An anal,sis was /erformed to understand
the ga/ and identif, actions to close it.
6.
Conce)t &esign
would /ro0ide a high:le0el conce/t 0iew of the
desired state for Unit, .lectronics, or a future state 0ision for what
the /roFect team collecti0el, agreed the, wanted success to loo( li(e.
It included deli0era+les such as +loc( la,outs, determining the num+er
of cells, what /roducts are made in the cells, num+er of +usiness
units, etc.
;.
1etaile& &esign
would /ro0ide a detailed 0iew of the future state. It
descri+ed all those elements that ma(e the future state a realit, and
included deli0era+les such as cell equi/ment requirements, equi/ment
loads, Nan+an siIes, staUng needs, o/erating rules, material
/lanning and control /rocess at the cell le0el, cell team mem+er roles
and res/onsi+ilities, etc.
?.
8!)le!entation )lan
would de0elo/ an im/lementation /lan and
include the time frame, identi2ed deli0era+les, assigned ownershi/,
transition strateg,, and sequence of e0ents to ma(e the future state a
realit,.
<.
0ec"tion
actuall, would de/lo, the im/lementation /lan.
7=@
As each indi0idual /roFectPs team anal,Ied and designed their im/ro0ements,
the, were required to recei0e a//ro0al at each ste/ +efore mo0ing on
to su+sequent ste/s. This ensured control of the /rogram. It (e/t the steering
committee engaged in the /roFect and made sure that the, +ought into the
design solutions +efore going too far with an una//ro0ed design. It also
enhanced integration +etween the /roFects +ecause the steering committee
was made u/ of cross:functional managers co0ering all as/ects of the +usiness.
Therefore, the, were the o+Fecti0e third:/art, 0iew that loo(ed at the
solutions from an outside /ers/ecti0e.
)hen it came time for im/lementation, the /rocess owners Cthose who
had to li0e with the new /rocess after the /roFect was o0erD were in the dri0erPs
seat for de/lo,ment. The design team was to still remain assigned to the
/roFect until the /rocess owner agreed the new /rocess wor(ed and was doing
what it was designed to do.
The one o0erriding strateg, was to /ro0e out the mechanics of the new
/rocess in the old facilit,. )hen the new o/erational /rocess for the 2rst
+usiness unit was sta+le, then it would relocate to the new facilit,, there+,
minimiIing ris( and a0oiding a dou+le mo0e of equi/ment.
."ecution of the im/lementation /lan had a few (e, as/ects worth notingB
7. The res/onsi+ilit, for e"ecution was handed o0er to the indi0iduals
who had ownershi/ for the new /rocess after im/lementation, there+,
requiring +u,:in to the new design +efore de/lo,ment. This reduced
the +urden of ha0ing to JsellK the new design to those on the sho/
Loor.
3. A /ilot cell a//roach was used, +, which the im/lementation initiall,
concentrated on one manufacturing cell, gathered all the lessons
learned from that cell, and then carried those onto the ne"t manufacturing
cell. This minimiIed ris( to the /roFect and allowed the
/roFect teams to collecti0el, concentrate their energies on one /ilot
cell during the learning stages of im/lementation.
5. $usiness units were de/lo,ed one +, one in accordance with the
manufacturing cells the, su//orted. This allowedB C7D the organiIation
changes to ta(e /lace +ased around a s/eci2c /roduct famil,,
and C3D ownershi/ for all the o/erational /rocesses that a1ected that
famil, to +e quic(l, ado/ted. This in turn accelerated the arri0al of
+ene2ts at the +ottom line for that gi0en /roduct famil,.
75A
ProCect "ime 'ine
"ec$ni%ues .tili!ed
1ate Milestone
*ecem+er 7==< Su//l, chain /roFect launched
-e+ruar, 7==@ UH! /rogram detail s/eci2cation
March 7==@ UH! /roFect team mo+iliIed
Gune 7==@ Material /lanning/control design a//ro0ed
Gul, 7==@ Pilot cell detail design a//ro0ed
August 7==@ urrent +aseline /rocess com/leted
Se/tem+er 7==@ Pilot +usiness unit design a//ro0ed
Hcto+er 7==@ 9lo+al su//l, chain strateg, a//ro0ed
&o0em+er 7==@ -irst cell goes li0e
*ecem+er 7==@ -irst cell e"it criteria satis2ed
Ganuar, 7=== -irst +usiness unit goes li0e
A/ril 7=== &ew /lant comes on line
$orksho) Training To)ics A&&resse&
Program and /roFect
management
harter, milestone /lan, haIards, issue log,
/rotocol, /roFect organiIation, /roFect 2le,
ris( assessment, detail schedule, deli0era+les,
control mechanisms
hange management ommunication /lanning, reaction to change,
resistors
Lean manufacturing
C-i0e Primar,
.lementsD
Hne:/iece Low, standard wor(, wor(a+le wor(,
/ercent loading chart, forward /lan, crosstraining,
runner, re/eater, stranger, ta(t time,
Nan+an, A$ material management, ;S
house(ee/ing, /ull scheduling, 0isual control,
roles and res/onsi+ilities, o/erating rules,
sho/Loor metrics, ser0ice cell agreements,
mi":model manufacturing, P/S anal,sis,
/roFect:focused management, continuous
im/ro0ement, routing anal,sis
$usiness /rocess
redesign
$aseline /erformance, ga/ anal,sis, future
state, conce/t design, detail design,
im/lementation /lanning, transition strateg,
Process 0alue anal,sis Su//lier:in/ut:/rocess:out/ut:customer
ma//ing CSIPHD
757
Bene)ts Ac$ie(ed
'essons 'earned
A
Adhere to and constantl, monitor meeting times and /roFect deli0era+les.
If a deli0era+le is going to +e missed, immediatel, address
the issue and de0elo/ a reco0er, game /lan. In this /articular case, it
should +e noted that the Me"ican culture was not attuned to e"act
time frames and s/eci2c scheduled commitments.
A
*o not assume a grou/ understands terms +eing usedM rather, 0erif,
that the, do understand the terms +eing used. CommunicationY
ommunicationY ommunicationYD Se0eral terms such as
tea!
and
5anban
were new to this culture.
A
*ri0e to detail as earl, as /ossi+le in the /roFect to assure (nowledge
transfer. If the /roFect team can de0elo/ the detail schedule, with the
a//ro/riate deli0era+les, in the correct sequence, the, are demonstrating
understanding. This /re:/lanning is critical when it comes
time to in0ol0e other resources outside the /roFect team Ce.g., /rocess
owners, s/ecialistsD for scheduling meetings, 0erif,ing information,
and discussing design o/tions.
4eli(ery Performance F&RS4G
GH@D =Pre6.2R>
=I>
As o* EH@@
=I>
Target
=I>
!unner /roducts 6@ =@ ==
!e/eater /roducts 6? =< =<
Stranger /roducts 67 =4 =4
Manufacturing 'ead3"ime
GH@D =Pre6.2R>
=ho"rs>
As o* EH@@
=ho"rs>
Target
=ho"rs>
!unner /roducts 37 7? 77
!e/eater /roducts 54 34 7;
Stranger /roducts ;4 35 3;
GH@D =Pre6.2R>
=I>
As o* EH@@
=I>
Target
=I>
Producti(ity
?< << @6
GH@D =Pre6.2R>
=&ays>
As o* EH@@
=&ays>
Target
=&ays>
In(entory
7@4 74? ?4
75:
A
UtiliIe /roFect leader integration meetings to ensure that cross:functional
team issues are +eing addressed and communicated. *e/ending
on the /roFect, this should ta(e /lace at a minimum of once /er
wee(. This as/ect is critical when multi/le initiati0es are +eing underta(en
simultaneousl,.
A
*e0elo/ and roll out the communication /lan earl, in the /rocess to
a0oid e"cessi0e rumors and s/eculation. .m/lo,ees need to +e
informed that a new /roFect is underwa,, wh, it is +eing done, and
how the, are +eing a1ected.
A
!ecogniIe indi0idual ca/a+ilities and limitations when assigning
/roFect roles. *o not o0erestimate the a+ilities of indi0iduals +ased
on their enthusiasm for the /roFect. #erif, that the, ha0e +een allocated
the time for their acti0ities and ha0e the e"/ertise to do the Fo+.
A
Ma(e sure /roFect /rotocols and /roFect 2les are utiliIed religiousl,
throughout the /roFect life c,cle. The /roFect 2le is the J+i+leK for the
/roFect. It contains the /roFect status, issues, game /lan, and e0idence
of /rogress. At the end of the /roFect, it /ro0ides a guideline for the
ne"t team that has to im/lement a similar initiati0e.
A
*ocument /roFect roles and res/onsi+ilities earl, in the /roFect. Ma(e
it 0er, clear who has ownershi/ for what at the 0er, +eginning of the
/roFect. Lea0e no gra, areas or e"tensi0e o0erla/ of accounta+ilities.
This will sa0e a lot of headaches later in the /roFect.
A
UtiliIe J$el+inK /ro2les for insight whene0er /ossi+le. Meredith $el+inPs
team role /ro2les /ro0ide 0alua+le insight a+out the ma(eu/ of
a team and the /ro+a+ilit, of success. Ta(e ad0antage of this insight
whene0er /ossi+le.
A
!equire full:time team mem+ers during the design and anal,sis /hase.
Part:time teams will onl, +e a+le to gi0e /art:time results. )hen a
/roFect team has onl, 34W of its team mem+ersP time, it is 0er, diUcult
to maintain team continuit, and focus o0er the life of the /roFect.
A
.nlist /rocess owner +u,:in to the new redesigned /rocesses. Process
owners should +e gi0en res/onsi+ilit,, accounta+ilit,, and authorit,
C!AAD for im/lementation whene0er /ossi+le. The, will own the
/rocess after the /roFect is com/lete and therefore must agree with
the new design. The, must acce/t ownershi/ for the designM therefore,
the, should +e intimate with its de/lo,ment.
A
oordinate rollout of the /roFect with to/ management a//ro0al. To/
management has ultimate res/onsi+ilit, for what ha//ens at the /lant
and therefore should a//ro0e maFor changes to the +usiness /rocess
that are under their control.
75<
A
Train all em/lo,ees who will +e in0ol0ed in the /roFect, not Fust the
design team. Process owners need to (now how the /roFect is +eing
managed, where the, 2t in, and the o0erall direction and /hiloso/h,
relati0e to lean management.
"estimonials
J-rom the 2rst diagnostic to the end of the /roFect, it was the stead,
/ressure, honest,, and /rofessionalism of all the teams that deli0ered
success. The constant feed+ac( reall, hel/ed (ee/ us on the right /ath.K
B'ice Presi&ent, 2)erations
J$, reorganiIing the
entire
Me"ico H/erations organiIation into cell
manufacturing +ased +usiness units, we e"/ect to see the following measura+le
resultsB
J7. Producti0it, im/ro0ementsB reduced direct head:count requirements,
e"tensi0e training /rograms and IP /rograms.
J3. Increased manufacturing Le"i+ilit,, the nature of cell manufacturingM
we will also +e hea0il, cross:trained at the cell and su//ort
team mem+er le0els.
J5. Management +, o+Fecti0eB 0irtuall, e0er, de/artment in the facilit,
has +een tas(ed to de0elo/ /erformance metrics +, which to
assess their /erformance, including the +usiness units.
J6. !eduction in the cost of qualit,B we ha0e im/lemented /rogressi0e
ins/ection through/ut the /lant, reducing the num+er of
ins/ectors.
J;. Im/ro0ed health and safet,B the focus on cell ownershi/ along
with ;S training will im/ro0e the sho/ organiIation as well as
/lant cleanliness.
J?. To mo0e from +eing one of Interma"Ps lowest rated su//liers to
one of the +est in less than one ,ear.K
B1irector Plant 2)erations
JTa(ing a signi2cant ste/ forward in the /rogram//roFect management
/rocess accom/lished a num+er of /ositi0e initiati0esB
J7. lari2ed the roles and res/onsi+ilities of the management, teams,
and /artici/ants.
75=
J3. Set forth a standard set of o/erating rules for all the teams to
follow.
J5. Pro0ided a message to all of management that the standard /rocesses
will +e em+raced.
J6. Pro0ided a team structure that a1ords accounta+ilit, for its mem+ers
and leadershi/.K
BProgra! Manager
JUnit, made signi2cant im/ro0ements in their o0erall qualit, and manufacturing
/rocess. XThe score of <? on this new sur0e,, as com/ared
to sur0e, scores of ?; in A/ril 7==@ and ;5 in *ecem+er 7==<, X is one
of the +est scores in the shortest /eriod of time among Interma"
su//liers.K
B8nter!a0 :"ality Syste! A"&itor
755
7>
&ase Study B:
Bai!en E(ent3Based
'ean Program
&ompany Pro)le
he headquarters for )interton or/oration, a a7.; +illion a ,ear /roducer
of industrial /roducts, are located a+out 74 miles west of the
le0eland downtown cit, limits. )interton was /rimaril, segregated
into three o/erating di0isions, a centraliIed sales/distri+ution o/eration, and
an inde/endent research and de0elo/ment facilit,. The cor/oration managed
5@ indi0idual manufacturing facilities C3< in the U.S. and 77 internationall,D.
The, em/lo,ed a//ro"imatel, 77,<44 /eo/le and utiliIed se0eral inde/endent
distri+utors to su//l, their 0arious /roduct lines to the mar(et/lace.
These lines included /roducts such as +all+earings, industrial a//lication
chain, cou/lings, electrical/mechanical com/onents, seals, con0e,or trac(,
gears, motors, and hoists.
The )interton +rand name goes +ac( o0er 744 ,ears. The, ha0e the re/utation
of /ro0iding a qualit, /roduct that lasts. The, had +een a+le to +uild
a strong mar(et /resence in &orth America o0er the ,ears throughB C7D good
+rand:name equit,, and C3D acquisition of other +usinesses. These two elements
allowed them to grow into a siIa+le organiIationM howe0er, as time
/assed, the mar(et/lace changed and foreign com/etition +egan to erode a
signi2cant share of their mar(et. Since )interton or/., as a whole, had +een
o/erating in a 0er, mature industr,, their introduction of new /roducts to
su//ort organic growth had +een limited o0er the ,ears. The, su//orted their
"
75>
/rimar, customer +ase through a 2nished:goods distri+ution warehouse s,stem
which was good from a res/onsi0eness stand/oint when /roduct was on
the shelf, +ut it required a signi2cant in0estment in in0entor, to maintain.
4ri(ers for &$ange
)interton or/. was not the dominant com/etitor in man, of the mar(ets
it ser0ed. Although some of the indi0idual sites were /erforming quite well
from a 2nancial /ers/ecti0e Ccash Low, /ro2t margins, return on sales, etc.D,
o0erall the, were e"/eriencing /ro+lems from an o/erational /ers/ecti0e.
Se0eral of the com/anies were ha0ing trou+le (ee/ing their full /roduct
lines in stoc( on the warehouse shel0es within the distri+ution centers.
$ecause man, of these com/anies had +een una+le to lin( u/ with H.Ms
for new /roduct introductions, man, of their /roducts were at the end of
their /roduct life c,cles and com/eting almost entirel, on /rice Csimilar to
a commodit, /roductD. The organiIation design, manufacturing architecture,
and material Low methodologies were struggling to satisf, new e"/ectations
for o/erational /erformance.
The maForit, of the o/erations were managing all their /roducts as J+atch
and queueK through manufacturing resource /lanning CM!P IID. All /roducts
were scheduled with the same /lanning and control /rocess regardless
of their /roduct demand +eha0ior. a/acit, /lanning was not utiliIed well
as a management tool, and /roduction orders were usuall, launched to the
sho/ Loor and ca/acit, constraints reconciled at that time. It was not
uncommon to 2nd the master /roduction schedule CMPSD managed 0ia sales
dollars rather than +, /roduction unit.
#isi+ilit, on the sho/ Loor in regard to /erformance to /lan for deli0er,,
qualit,, in0entor, turns, c,cle time, equi/ment downtime, /roducti0it,, etc.
was not clearl, e0ident. There was limited tie:in +etween sho/Loor acti0ities
and o0erall +usiness o+Fecti0es. It was diUcult to see where em/lo,ees were
engaged in the o/eration of the +usiness, due to the lac( of feed+ac( as to
how the, were /erforming. In res/onse to the need for the entire )interton
organiIation to +e com/etiti0e, a signi2cant change in the wa, the
manufacturing
sites were +eing managed was +eginning to e0ol0e.
ProCect Background
In &o0em+er 7==@, )intertonPs /arent com/an, merged with a second
com/ara+le
o/eration. This second o/eration had s/ent se0eral ,ears im/lementing
Case St"&y B+ 5ai3en vent6Base& Lean Progra!
756
lean manufacturing across most of its com/anies. Man, of these com/anies
had +een following an a//roach that de/lo,ed lean manufacturing strictl,
0ia a series of NaiIen e0ents or J+litIes.K After se0eral ,ears of conducting
NaiIens in manufacturing, it had +ecome e0ident to these com/anies that
man, of the lean techniques used +, the sho/ Loor were a//lica+le to
administrati0e
en0ironments as wellM therefore, the, e"/anded the /rogram to co0er
the entire +usiness o/eration. This strategic initiati0e +ecame (nown as Jlean
enter/rise.K
-ollowing the merger, the new /arent com/an, e"/ected each of its di0isions
and com/anies to ado/t the im/lementation of lean manufacturing
within their facilities. )hen it came time for )interton to +egin its lean
/rogram, the, ado/ted the NaiIen e0ent:+ased a//roach. In addition, the,
su//lemented the NaiIen e0ent:+ased a//roach with the utiliIation of a 6:
da, lean class to enhance (nowledge transfer to the wor(force. This 6:da,
lean class was designed for those who alread, had attended an e0ent in order
to reinforce those to/ics co0ered during the NaiIen e0ent. This cor/oratewide
/roFect was launched with an initial /ilot de/lo,ment at two )interton
com/anies in A/ril 7===.
)interton or/oration initiall, targeted 35 com/anies in &orth America for
the ado/tion of lean manufacturing, with a time frame for im/lementation
of A/ril 7=== through *ecem+er 7===. The com/anies were identi2ed,
selected, and di0ided u/ +etween se0eral internal management consultants
who had /re0ious (nowledge of lean manufacturing conce/ts to su//ort the
rollout of the lean enter/rise /rogram. The lean NaiIen e0ents and 6:da, lean
classes were scheduled and attendees in0ited.
There were two /rimar, o+Fecti0es for the /rogram. The 2rst was to
conduct at least one NaiIen e0ent at each of the 35 sites in order to introduce
the organiIations to the lean conce/ts and de0elo/ NaiIen e0ent leaders. The
second was to e"/ose as man, em/lo,ees as /ossi+le to the 6:da, lean class
+efore the end of *ecem+er 7===. The lean class target audience included
/lant managers, manufacturing managers, +u,ers, schedulers, /roduction
engineers, and 2rst:line su/er0isors.
The o0erall intent was to Fum/ start )intertonPs mo0e toward lean, to
educate as man, /eo/le as /ossi+le a+out lean tools and techniques, and to
demonstrate an im/ro0ement in o/erational /erformance through NaiIen
e0ent /roFects as soon as /ossi+le.
75?
ProCect Approac$
$eginning in A/ril 7===, com/anies +egan hosting the NaiIen e0ents at their
indi0idual facilities and in0ited attendees from other )interton facilities to
/artici/ate in the e0ents. The e0ents were intended to last 6 da,s and usuall,
concentrated on four se/arate /roFects, t,/icall, three /rocesses from the
sho/ Loor and one administrati0e /rocess. .ach /roFect had a cross:functional
team of @ to 73 /eo/le assigned to it. The strateg, was for these e0ents
to +e utiliIed as s/ring+oards of lean acti0it, within the o/erations. Hnce a
com/an, had conducted a NaiIen e0ent, the, were to continue following u/
with other e0ents as needed to 2nd waste in the +usiness and continuall,
im/ro0e the o/eration.
T,/icall, an e0ent lasted 5 to ; da,s, de/ending on /roFect sco/e, o+Fecti0es,
and whether the site had /re0ious e"/erience with NaiIen. The 2rst
da, consisted totall, of training and education. It was a mi"ture of lecture,
e"ercises, discussions, and simulations. The training addressed multi/le lean
manufacturing to/ics Ce.g., one:/iece Low, Nan+an, 0isual management,
measures, etc.D. The second and third da,s were the actual NaiIen e0ent itself,
during which the teamsB C7D +aselined the e"isting /rocessM C3D designed a
new /rocessM C5D demonstrated the new /rocess, including the rearrangement
of equi/mentM and C6D re:+aselined the new /rocess. Hn the fourth da,, the
teams re0iewed their successes and de0elo/ed a follow:u/ strateg, for an,
remaining Jto doK actions.
$efore the e0ent, there was some initial discussion with the com/an,
/resident a+out the current state of the +usiness and what lean enter/rise
could do for them. After agreeing on the four /roFects, /roFect team leaders
were assigned. These team leaders, if the, had not alread, run a NaiIen e0ent,
were required to attend the e0ent of another site in order to gain some
e"/erience in managing a NaiIen e0ent.
In addition to the NaiIen e0ents that were +eing conducted at each of the
sites, the 6:da, lean class was +eing deli0ered in order to reinforce the learning
/oints from the NaiIen e0ents and to e"/and the (nowledge +ase of )interton
em/lo,ees. This lean class was +eing /resented to audiences that had
alread, attended a NaiIen e0ent. $ecause there was a large num+er of
em/lo,ees
who needed to +e e"/osed to the additional lean material in a short /eriod
of time, the lean classes were conducted in /arallel with the scheduled rollout
of the NaiIen e0ents.
This NaiIen e0ent:+ased a//roach to im/lementing lean management
resulted in man, of the com/anies achie0ing demonstrated /erformance
changes during the one:wee( e0entM howe0er, se0eral of the com/anies were
75@
not a+le to sustain that change. In some instances, com/anies e0en re0erted
+ac( to their original /ractices and le0el of /erformance. It would a//ear
there were se0eral reasons for this outcomeB
7. A general lac( of /re/aredness e"isted +efore the NaiIen e0ent was
launched. Much of the data required in order to +egin the anal,sis
/hase on the second da, of the e0ent were not readil, a0aila+le. The
clari2cation to em/lo,ees as to managementPs e"/ectations was limited.
3. A great deal of confusion surrounded the entire wee(:long e0ent as
to what the, were doing and wh,. Little u/:front communication
a+out wh, this lean /rogram was im/ortant to the +usiness or how
it 2t into e"isting +usiness initiati0es had +een /resented.
5. The follow:u/ on Jto doK acti0ities and coordination of multi/le
assignments after the e0ent /ro0ed to +e quite a challenge for man,
of the com/anies. H/en items lingered for wee(s and sometimes
months. Ne, resources within the +usiness were o0erwhelmed with
wor( Ces/eciall, maintenance and information s,stemsD, and decisions
a+out what to do and where to go ne"t were not 0er, clear to
/eo/le within the +usiness.
Although man, com/anies struggled, se0eral com/anies were a+le to
achie0e im/ro0ed /erformance and successfull, sustain it. These com/anies
had se0eral traits in commonB
?. Lea&ershi).
There was a constant dri0ing force that o0ercame a/ath,
and did not let inertia set into the organiIation. There was an unwillingness
to allow statements such as J)e canPt do thatK or JThat wonPt
wor( hereK to sto/ the e1ort. The tenacit, to see it through and a
willingness to tr, new a//roaches were constants.
E. 1irection.
An o0erall /lan or 0ision as to what was ne"t or what success
loo(ed li(e when the /rogram had achie0ed its mission was 0er+aliIed.
Nnowledge a+out what the ne"t ste/s might +e and an understanding
of which technique to use ne"t along that /ath were e0ident.
J. Co!!on goalHobKective.
It was esta+lished u/ front with the /roFect
team what the, were tr,ing to achie0e in a quanti2a+le manner. There
was a concentration of their collecti0e e1orts on measura+le targets.
The, com/ared actual /erformance against those targets, /osted the
actual results in order to trac( /erformance, and were held them
accounta+le for achie0ing those targets.
7>A
G. S"))ort.
The, /ro0ided constant coaching and guidance to the /roFect
team in order to hel/ them gain con2dence with the tools and techniques.
There was continual interaction with the team to hel/ them
sta, on trac(, which remo0ed the /ossi+ilit, of inertia setting in and
/ro0ided encouragement through the tough times in order to (ee/
their s/irits u/.
The com/anies that e"hi+ited these traits were a+le to achie0e a change in
/erformance and sustain that change. In all cases, someone who held a
leadershi/
/osition within the o/eration demonstrated these traits. $e it a /resident,
general manager, or 0ice /resident, each of them was a dri0ing force for
ma(ing the NaiIen e0ent:+ased a//roach +e successful within their /lants.
ProCect "ime 'ine
Bene)ts Ac$ie(ed
GH@@ LH@@ MH@@ AH@@ DH@@ @H@@ ?FH@@ ??H@@ ?EH@@
N. ] 3 N. ] 6 N. ] 6 N. ] 6 N. ] ? N. ] 6 N. ] 5 N. ] 5 E
C@D C7?D C7?D C74D C7=D C<D C6D C;D E
L ] 5 L ] 7 L ] 5 L ] 5 L ] 5 L ] 3
/ote+
N. ] NaiIen e0entsM num+ers in /arentheses indicate the num+er of
/roFectsM L ] num+er of 6:da, lean management classes.
ProKect Ty)e :"antity Res"lt BeneCt
ell manufacturing 73 ,cle:time reduction 54[=;W
Producti0it, increase 7;[64W
SM.* 7? hangeo0er reduction 5;[=4W
Manufacturing Low 7= ,cle:time reduction 34[=4W
Administrati0e Low 7< ,cle:time reduction ?4[=4W
Nan+an/material /ull = In0entor, reduction ?4[=4W
Material Low/stores 6 ,cle:time reduction ?4[@4W
7>7
"ec$ni%ues .tili!ed
'essons 'earned
A
Proclaim a 0ision and clarif, a le0el of e"/ectation at the +eginning
of a /roFect. This is necessar, to set the tone, generate a focus for
common grounding, and hel/ engage all em/lo,ees in the change
/rocess.
A
a/ture the current /erformance of identi2ed /rocesses as a +aseline,
and measure actual /erformance results that directl, align with and
im/act the +ottom line. These should +e tangi+le measures related
to changes in the /rocess Ce.g., /erformance to /lan of /roduction
schedules, le0els of in0entor,, dollars of scra/ /er /roduct out/ut,
/roducti0it, of /roduct out/ut/manhour in/utD.
A
onduct /lanning and anal,sis of the +usiness +efore initiating the
NaiIen e0ent. An understanding of current +usiness initiati0es, where
the com/an, is going, and what le0el of /erformance is needed for a
/roduct and in what mar(ets is crucial.
A
Include acti0ities +oth +efore and after the wee( of the NaiIen e0ent
when /lanning for the e0ent. A lean road ma/ is necessar, in order to
communicate to e0er,one in the organiIation that this is a /rogram to
sta, and not Fust a JLa0or of the monthK initiati0e. $efore the NaiIen
e0ent is conducted, all the detailed anal,sis of demand management,
Lean manufacturing
CNaiIen e0entD
Hne:/iece Low, ta(t time, /ercent loading
chart, Nan+ans, material /ull, ;S
house(ee/ing, 0isual controls, /ro+lem
+oards, sho/Loor metrics, /rocess ma//ing,
SM.*, TPM, Po(a:,o(e
Lean manufacturing
C6:da,D
Gido(a, autonomation, Andon, 0isual controls,
Fust:in:time, ta(t time, continuous Low, /ull
s,stems, standard wor(, wor( element
anal,sis, ;S house(ee/ing, muda, /rocess
ma//ing, Nan+an, HeiFun(a, Po(a:,o(e, TPM,
H.., +ig si" losses, Fo+ instruction training,
cross:training
7>:
wor( content, equi/ment a0aila+ilit,, etc. should +e com/leted. After
the e0ent, it is im/ortant for the /roFect team to (now where to go
ne"t and what to e"/ect. This is accom/lished +, creating a road ma/
that loo(s +e,ond Fust the current wee(.
A
Plan on ha0ing the lean management e"/erts remain with the /roFect
for an e"tended /eriod of time during and after the NaiIen e0ent to
e"/lain, demonstrate, and 0erif, use of the lean manufacturing tools
and techniques. The constant coaching and guidance reinforce learning
of the tools and 0erif, that (nowledge has actuall, +een transferred.
A
!ecogniIe that there is an interrelationshi/ +etween +usiness /rocesses.
$usiness /rocesses function as a s/ider we+ of acti0ities, where
a change in one /rocess often a1ects other /rocesses. )hen de/lo,ing
lean manufacturing, it is im/ortant to (ee/ this in mind.
A
Plan a coordinated e1ort of all lean initiati0es across the /lant.
ProFects should +e integrated into one o0erall game /lan in order to
achie0e s,nerg, +etween the /roFects and ma(e sure the, are all
headed in the same direction.
A
Announce to the entire organiIation what is ha//ening, wh, the
com/an, is doing it, and who is in0ol0ed with the /roFect. )hen
/eo/le see acti0it, ha//ening within the organiIation and do not
understand what it is for or wh, it is going on, the, tend to +e
sus/icious of the /roFect and will not readil, engage themsel0es with
the e1ort.
A
Include /rocess owners in the NaiIen e0ent when conducting acti0it,
in their area. It is critical that the, understand the /ro+lems +eing
faced and that the, +u, in to the solution that has +een de0elo/ed.
After all, the, ha0e to li0e with the solution when the e0ent is o0er.
A
InstitutionaliIe or Jloc( downK the new wa, of doing +usiness
through documentation Cstandard wor(D and control C/erformance
measuresD to sustain the change. If the new /rocess is not recorded,
/resented for em/lo,ee training, and monitored as to 0ariation from
the design, then the /rocess has a 0er, high /ro+a+ilit, of returning
to the old wa,s.
7><
"estimonials
JThe four:da, class should ha0e +een done 2rst. It would ha0e gi0en me
a +etter idea what we were doing and wh,.K
B%irst6Line S")ervisor
JThe NaiIen e0ent was e"hilaratingY )e got more done in two da,s than
we ha0e in the /ast two ,ears.K
BSho)Noor 2)erator
JI feel li(e I ha0e +een gi0en a hammer, a screwdri0er, and a /air of /liers.
I ha0e +een shown some tools, +ut I ha0e no idea how to use them.K
Bngineering Manager
JA great deal of ha0oc is created o0er a few da,s and then no+od, remains
to hel/ clean u/ the mess after the e0ent. )e ha0e this long list of Vto doP
items and no+od, to do them.K
BSho) S")erinten&ent
JAfter seeing the lean class, I ha0e a +etter understanding of the a//roach
and where se0eral of the techniques 2t together, +ut I am still short on
how to use the tools and when.K
B:"ality ngineer
JThe e0ent was great. )ho is going to ma(e sure we (ee/ doing itRK
BSho)Noor 2)erator
7>5
7>
&ase Study &:
,ig$3+olume3;ocused
;actory ProCect
&ompany Pro)le
ithin wal(ing distance of the cit, limits of Hrlando is a manufacturer
of engineered chain /roducts called T,or hain. T,or
hain is actuall, the com+ination of two se/arate facilities, T,ron
and or+in. .ach o/eration had +een +uilding chain since the 7@44s, +ut
/lant rationaliIation resulted in consolidating the /lants in 7==7. The
Hrlando site had +een e"/eriencing a reduction in siIe and head count since
the 7=<4s and had the s/ace a0aila+le to relocate equi/ment.
T,or was a unioniIed sho/, and wor(ers were mem+ers of the United
Steel )or(ers local @3=. There were 5;4 em/lo,ees on the /a,roll, of which
7<; were direct la+or. The facilit, s/rawled o0er 644,444 square feet and was
aligned in a traditional factor, la,out with assem+l, de/artments and fa+rication
de/artments. The /rimar, manufacturing /rocesses were turning,
grinding, cold forming, heat:treating, and the manual and semi:automated
assem+l, of chain.
H0er the ,ears, this o/eration was at one /oint a+le to increase sales to
o0er a;4 million /er ,ear, with a /ea( of a;; million coming in 7==?M howe0er,
se0eral ,ears of mar(et decline, changes in ownershi/, and a lac( of in0estment
had left the com/an, with sales re0enues of a5@ million and dro//ing
/ro2ts. .1orts to con0ince se0eral di1erent owners that a signi2cant in0estment
in ca/ital was required to turn this o/eration around were not successful,
thus lea0ing them with limited alternati0es to im/ro0e the o/eration.
*
7>>
4ri(ers for &$ange
Hther than the o+0ious loss in mar(et share, decreasing re0enues, and limited
/ro2t num+ers, this o/eration was +eing hit with hea0, foreign com/etition
from such unli(el, sources as India, hina, Singa/ore, and Taiwan. The
foreign com/etition was /roducing a /roduct of com/ara+le qualit, at a cost
signi2cantl, less than T,orPs. In addition to the e"ternal forces for change,
there were internal forces as well. )hen T,orPs new /arent com/an, came
to 0isit, it was made clear that this o/eration needed to ma(e some signi2cant
changes to com/ete as a 0ia+le entit, within the grou/. )ith these identi2ed
issues as dri0ers for change, it was not diUcult to esta+lish a moti0ation for
change within this organiIation.
ProCect Background
In 7==?, a strategic /lan was de0elo/ed to im/lement Jfocused factoriesK
throughout the facilit,. This /lan was well thought out, +ut it was also
e"/ensi0e due to the required in0estment in new ca/ital. In earl, 7==<, T,or
hain in0ited a grou/ of /roducti0it, consultants to wor( with the management
team and sho/ Loor to +oost on:time deli0eries and increase /roducti0it,.
The /roFect did not go as /lanned and had a negati0e im/act on
relations +etween management and the sho/Loor union wor( force. This
unresol0ed conLict was still e0ident when, in Ma, of 7===, T,or again
initiated a com/an,:wide e1ort to im/ro0e the o/eration through the
im/lementation
of lean manufacturing.
The lean e1ort initiall, +egan as a series of NaiIen e0ents. The /rogram
oUciall, (ic(ed o1 in Ma, 7===, with four indi0idual NaiIen /roFects CSM.*,
Nan+an, and two /roduct Low cellsD. Three of these /roFects were selected
+ecause the, were the right siIe to quic(l, demonstrate a change in
/erformance
through the su//ort of sho/Loor em/lo,ees. It was considered critical
to +egin mending relations with the union and tr, wor(ing together through
the NaiIen e0ent as a wa, to Fointl, im/ro0e the o/eration. The fourth /roFect,
Nan+an, was considered an integral /art of the de0elo/ment of a Jfocused
factor,K conce/t that was to +e de/lo,ed later on in the ,ear. *uring the e0ent,
target sheets were created for each of the indi0idual /roFects, and se0eral of
the /roFects were a+le to demonstrate im/ro0ement during the e0ent.
H0er the course of the ne"t few months, T,or hain continued to launch
additional NaiIen /roFect teams across the factor, as Jislands of im/ro0ement.K
A tremendous amount of energ, was +eing e"/ended and initiati0es
Case St"&y C+ (igh6'ol"!e6%oc"se& %actory ProKect
7>6
were getting startedM howe0er, the, were ha0ing trou+le com/leting all the
/roFects, including the focused factor,. )orse ,et, results were not showing
u/ on the +ottom line. In &o0em+er, it was determined that a change in
course was necessar, in order to channel the collecti0e energies of all
em/lo,ees
and +egin to generate results at the +ottom line. So, a course was set for
im/lementing focused factories across the entire facilit,.
In *ecem+er 7===, the *irector of Plant H/erations conducted a re0iew of
the /rogramPs o0erall /rogress and led a discussion of alternati0e a//roaches
with the President of T,or hain and the com/an,Ps controller. This meeting
was used to clarif, e"ecuti0e management e"/ectations relati0e to the
lean /rogram and to o+tain su//ort for the new direction.
After a length, discussion, the, decided u/on the following actionsB
7. hange the course of the /roFect to concentrate on getting the focused
factories u/ and running, rather than s/reading the e1orts across the
o/eration through the Jisland of acti0it,K a//roach.
3. Hnce the 2rst focused factor, was u/ and running as a good Jwor(ing
modelK that satis2ed an identi2ed e"it criteria, re/licate that model
throughout the +alance of the factor,.
5. Scale +ac( the amount of NaiIen /roFects currentl, scheduled and
com/lete those /roFects that had alread, +een started +efore underta(ing
an, new NaiIen /roFects.
6. S/ecif, a /roFect management structure with /rotocol, steering committee,
detail schedules, de2ned deli0era+les, assigned ownershi/ for
deli0era+les, etc.
;. hange organiIational res/onsi+ilit, for the entire set of manufacturing
/rocesses that su//ort a focused factor,, and select a focused
factor, manager with ownershi/ for the /roduct from Jcradle to
gra0e.K
?. .sta+lish o/erational measures that would demonstrate +ottom:line
im/ro0ements through im/ro0ed in0entor, turns, reduced head
count, reduced /ast:due orders, etc. and would hold the focused
factor, manager accounta+le for the /erformance.
$, re0iewing annual demand 0olumes for the entire line of chain /roducts,
T,or was a+le to determine that the highest 0olume /roduct demand
7>?
was for their snowmo+ile dri0e:chain /roduct line, which was alread, +eing
im/lemented +ut with limited success. &ot onl, was this a high:0olume
demand /roduct, +ut it was also a 0er, standard /roduct with little com/le"it,
+, wa, of manufacturing /rocesses. In addition, T,or claimed @@W of
the mar(et for snowmo+ile chainM therefore, it was determined to ma(e that
facilit, the /ilot focused factor,.
The /rimar, o+Fecti0es esta+lished for the snowmo+ile focused factor,
includedB
7. .liminate all /ast:due orders C;444 strands at the time of /roFect
launchD.
3. Im/ro0e in0entor, turns from ; to ;4.
5. UtiliIe Nan+an re/lenishment for all high:0olume com/onents.
6. Assign a focused factor, manager.
;. Im/lement a s(ill:+ased /a, s,stem to re/lace the current unioniIed
indi0idual incenti0e /a, s,stem.
?. UtiliIe one:/iece Low methodolog, Cone strand of chainD to enhance
qualit, feed+ac( and s/eed manufacturing c,cle time.
ProCect Approac$
As was stated earlier, in *ecem+er 7=== the o0erall a//roach to the lean
initiati0e was altered. !ather than s/read the energ, of man, /eo/le across
a large area Cremem+er, this facilit, is 644,444 square feetD, the a//roach was
changed to that of esta+lishing a good wor(ing model that could +e du/licated
throughout the factor,.
The initial ste/ in this /rocess was to esta+lish a full:time lean team
dedicated to de/lo,ment of the lean /rogram. This allowed all those indi0iduals
who were tr,ing to /rioritiIe acti0ities with /art:time resources to esta+lish
a single, /rimar, focus E im/lementation of lean manufacturing. The
ne"t ste/ was to concentrate e1orts on securing a win. This was accom/lished
+, designating s/eci2c /roduct grou/s or families Ce.g., snowmo+ile chainD
toward which the lean team would channel their e1orts at de0elo/ing focused
factories. This is not to sa, that all other NaiIen e1orts were /ut on hold.
T,or Fust needed to reduce the quantit, of NaiIen e0ents that had +een
scheduled and reschedule them to some later date. This relie0ed the +urden
on the organiIation infrastructure so that acti0ities could now +e com/leted
and the focused factor, conce/t could +e de/lo,ed. The o0erall conce/t for
the focused factories required se0eral changes within the o/erationB
7>@
7. The ownershi/ for /erformance of the focused factor, was realigned
to the entire /rocess of /roducing chain. .0en though assem+l, cells
were at one end of the +uilding and fa+rication of com/onents used
in the assem+l, of chain was located at the other end of the +uilding,
res/onsi+ilit, for +oth was assigned to the focused factor, manager
of that /roduct grou/ing.
3. In the focused factories, the assem+l, cell was esta+lished 2rst, as it
was closest to the customer. There were s/eci2c lean /rinci/les
required for the assem+l, cell to function, and s/eci2c /erformance
le0els were e"/ected. As the cell achie0ed these Je"it criteriaK and was
considered sta+le, then the fa+rication cell was +rought on +oard.
C-or the snowmo+ile factor,, these e0ents ha//ened simultaneousl,
due to the fact that it had a narrow /roduct line with high:0olume
demand and dedicated equi/ment.D
5. )hen +oth cells had satis2ed the e"it criteria and were /erforming
at a sta+le le0el, then the, could +e lin(ed through a Nan+an /ull
signal for /art re/lenishment. This action eliminated the stoc( room
and generating /art demand +ased on M!PII.
6. The last ste/ was to relocate the entire focused factor, to its 2nal
con2guration, there+, com/letel, lin(ing the entire focused factor,
from +oth a /h,sical and a logistical /oint of 0iew. It was done in
this manner /rimaril, +ecause of the e"/ense and ris( in0ol0ed in
mo0ing the fa+rication equi/ment +efore (nowing which end of the
+uilding was a//ro/riate.
;. The indi0idual incenti0e s,stem used to com/ensate the wor(force
had to +e re/laced +ecause it was dri0ing the wrong +eha0ior and did
not 2t with the new focused factor, conce/t. Therefore, T,or management
de0elo/ed a new s(ill:+ased /a, s,stem. $, la+or contract,
the, could do this +ecause the, were designing a new wor( area with
com/letel, di1erent o/erating rules from the rest of the sho/. This
new s,stem allowed direct la+or em/lo,ees to ma(e the same rate of
/a, the, made under the old s,stem, +ut onl, after the, attained a
s/eci2ed le0el of s(ill. The, esta+lished one Fo+ classi2cation and
called it Jfactor, technician.K
-or the lean /roFect team, selecting the focused factor, manager as soon
as /ossi+le was (e, to successfull, im/lementing the new structure. The
original launch for the snowmo+ile /roduct grou/ had +een struggling. It
was decided that a leader assigned to manage the entire manufacturing /rocess
would accelerate the im/lementation immensel,. This /ro0ed to +e
76A
a+solutel, correct. In addition to the organiIational change for the focused
factor, manager, the team had to address union issues surrounding the new
/a, scenario. Management e"/lained to the union leadershi/ how the new
/a, s,stem was to wor( and then /ut the new /osition out for +id with a
0er, /ositi0e res/onse.
Hnce the leader was assigned and the /a, s,stem installed, the area was
o1 and running. After o/erating with the new lean /rocesses for se0eral wee(s,
the /erformance of the focused factor, and the team +uilding among direct
la+or cell team mem+ers had im/ro0ed signi2cantl,. The o/erators were
concentrating
0er, hard on eliminating Cfor the 2rst timeD their /ast:due orders
and 2"ing qualit, issues as the, surfaced. In an e1ort to accommodate
crosstraining
needs, the cell team set u/ a game /lan for integrating cross:training
the 2rst two wee(s of the month and focusing on /roduction the last two
wee(s of the month. )or(ing in this manner allowed the cell team time to
de0elo/ its /eo/le and still satisf, customer demand requirements.
The lean team was a+le to rather quic(l, re/osition the focused factor,
conce/t from a struggling im/lementation to a high:L,ing success +, le0eraging
three elementsB C7D focusing the im/lementation e1ort around a /roduct
grou/ing, C3D satisf,ing the needs of the em/lo,ee through the /a, s,stem
and training /lan, and C5D assigning accounta+ilit, for the /rocesses that
/roduced a gi0en /roduct in order to im/ro0e /erformance and achie0e
+ottom:line results.
ProCect "ime 'ine
Milestone Plan
@H@@ ?FH@@ ??H@@ ?EH@@ F?HFF
ProFect is
launched
Area is
cleared and
/re/ared
Assem+l, is
mo0ed and
/roduction
is sta+le
om/onent
manufacturing
is
relocated and
/roduction
read,
Snowmo+ile
focused
factor, is
functioning
as a unit
767
"ec$ni%ues .tili!ed
Program and /roFect
management
harter, milestone /lan, haIards, issue
log, /rotocol, /roFect organiIation,
/roFect 2le, ris( assessment, detail
schedule, deli0era+les, control
mechanisms
-ocused factor,
managerB assessment
and selection
andidate self:e0aluation, change
rece/ti0it, /ro2le, $el+in roles, grou/
inter0iew, ga/ anal,sis, de0elo/ment
/lan
Lean manufacturing
C-i0e Primar,
.lementsD
Hne:/iece Low, standard wor(, wor(a+le
wor(, /ercent loading chart, forward
/lan, cross:training, runner, re/eater,
stranger, ta(t time, Nan+an, A$ material
management, ;S house(ee/ing, /ull
scheduling, 0isual control, roles and
res/onsi+ilities, o/erating rules,
sho/Loor metrics, ser0ice cell
agreements, mi":model manufacturing,
P/S anal,sis, /roduct:focused
management, continuous im/ro0ement,
routing anal,sis
Lean manufacturing
CNaiIen e0entsD
Hne:/iece Low, ta(t time, /ercent
loading chart, Nan+ans, material /ull, ;S
+oards, sho/Loor metrics, /rocess
ma//ing, SM.*, TPM, Po(a:,o(e
Lean manufacturing
C6:da,D
Gido(a, autonomation, Andon, 0isual
controls, Fust:in:time, ta(t time,
continuous Low, /ull s,stems, standard
wor(, wor( element anal,sis, ;S
house(ee/ing, muda, /rocess ma//ing,
Nan+an, HeiFun(a, Po(a:,o(e, TPM, H..,
+ig si" losses, Fo+ instruction training,
cross:training
76:
Bene)ts Ac$ie(ed
'essons 'earned
A
UtiliIation of a full:time Jlean teamK is necessar, in order to esta+lish
/riorities and consolidate e1orts in the same direction.
A
Assigning ownershi/ for /rocess im/ro0ement along /roduct grou/ings
remo0es the functional silo 0iew of /ro+lems and assigns
accounta+ilit, for /erformance im/ro0ement to one /erson. This
organiIational change has a signi2cant inLuence on how quic(l,
/roFect o+Fecti0es are achie0ed.
A
Agreeing on e"/ectations earl, in the /roFect is necessar, so that all
/arties (now what the, are tr,ing to achie0e and what success loo(s
li(e when the, get there.
A
Nnowing which lean tools and techniques to use when and how /la,s
an inLuential role in /roducing +ottom:line result quic(l,.
A
S/reading /art:time resources across man, initiati0es leads to misalignment
of /riorities and the ina+ilit, to com/lete all assigned
acti0ities. It /laces undue +urdens on the organiIation and ma(es it
diUcult to com/lete an, acti0ities well.
A
Assigning the com/an, controller to the steering committee can ha0e
a tremendous +ene2t when it comes time to de0elo/ metrics for a
/roFect and when it is time to Fustif, the focused factor, conce/t to
others in the organiIation.
A
It is +est to assess and select the focused factor, manager as earl, in
the /rocess as /ossi+le, de2nitel, +efore im/lementation.
A
Indi0idual incenti0es /roduce localiIed o/timiIation, which does not
su//ort the lean manufacturing conce/t. The remo0al of an indi0idual
incenti0e:+ased /a, s,stem is a mustM howe0er, it needs to +e done
with the com/lete (nowledge and understanding of the union, /articularl,
in light of how it is going to a1ect an indi0idualPs /a,.
Metric Baseline
Act"al
=F?HFF> Target
*eli0er, 64W =4W 744W
Lead:time @ wee(s 5 wee(s 3 wee(s
In0entor, turns ; 54 ;4
S/ace <6;4 ft
3
?@44 ft
3
E
Head count 37 7< 76
76<
A
$e sure to de0elo/ and follow a game /lan when changing the wor(
rules and reward s,stem of em/lo,ees. Thin( through how to get
from /oint A to /oint $. It is not enough to ha0e a good solution to
a /ro+lem. That solution must +e e"ecuta+le.
"estimonials
JI ha0e +een im/ressed with the fundamental culture change that has
ta(en /lace with the im/lementation of lean in the focused factor,. )e
ha0e a long:standing histor, of detailed Fo+ descri/tions wor(ing in an
incenti0e:/a, structure. The formulation of the factor, technician /osition,
which includes res/onsi+ilit, for all equi/ment and /rocesses along
with /roducing to customer demand, has allowed us to ma(e this culture
change with a high le0el of acce/tance from the wor( force.K
B%actory
Manager
JThe wa, the snowmo+ile and +loc( chain factor, is set u/ is a good idea.
The /arts are closer together and ,ou can catch the +ad /arts faster.
.0er,one hel/s each otherM that is a /lus. The +ig /ro+lem so far has +een
the heat:treat o/erationPs turnaround time on our /arts.K
BTechnician
JI li(e what I see with the new snowmo+ile cell factor,. )hat a great wa,
to do the right thing in +uilding chain. It will reall, wor(. I enFo, wor(ing
this wa,. )e should ha0e done this a long time ago.K
BTechnician
JLean manufacturing is a good idea. 9reat things ha0e resulted since the
+eginning of the focused factor,. Training needs to +e em/hasiIed more.
)ith the e"/erience that we ha0e in the area, /eo/le should recei0e the
+est training /ossi+le.K
BTechnician
JLean is a great conce/t with /otential in qualit, and /roducti0it,. It
+rings new challenges to the wor(force. Hur onl, /ro+lem is our heattreat
turnaround time.K
BTechnician
J-rom the initial conce/t of creating the focused factor,, we (new it was
going to +e a long Fourne,. There ha0e +een man, challenges along the
wa, and there will +e man, more. H0ercoming those challenges ma(es
for a stronger team en0ironment and wor( force. Im/lementation of lean
manufacturing ta(es dedication. 'ou must eat, +reath, and slee/ lean. If
,ou donPt, ,ou are not tr,ing hard enough. Success is ,our onl, o/tion.K
B%actory Manager
765
7>
&ase Study 4:
Bai!en E(ent3Based
;ocused ;actory Pilot
&ompany Pro)le
ocated in the western su+ur+s of *en0er, $el:!on is a manufacturer of
engineered chain /roducts. $el:!on +egan o/erations at this facilit, in
7=63, and the, em/lo, 547 /eo/le, of which 377 are mem+ers of the
local machinist union 7?<5. The facilit, is s/read across 5<4,444 square feet
and organiIed around the /roduction of its two main /roduct lines E
con0e,or idlers and ma(e:to:order chain. A//ro"imatel, one quarter of the
/lant has +een dedicated to the manufacture of idler /roducts, with the
remaining three quarters laid out in a traditional factor, Low for the /roduction
of ma(e:to:order chain. The /rimar, manufacturing /rocesses
within this facilit, include /unching, grinding, forming, heat:treating, welding,
/ainting, and the manual assem+l, of chain.
$el:!on had +een a+le to increase annual sales re0enue for the com+ined
/roduct lines to as high as a?5 million +ac( in 7==;. The, commanded a
signi2cant amount of a0aila+le mar(et share, in /art +ecause the, /roduced
Je0er,thing for an,+od,.K Hutside com/etition had ne0er reall, +een a se0ere
/ro+lemM therefore, $el:!on had alwa,s +een a source of /ositi0e cash Low
for the /arent cor/oration. $ecause the com/an, was +eing utiliIed as a Jcash
cow,K in0estment in the +usiness for maintaining and u/grading ca/ital
equi/ment had +een limited. .1orts to con0ince se0eral di1erent owners that
'
76>
an in0estment in ca/ital was required to sustain the o/eration and hel/ it
achie0e /articular +usiness o+Fecti0es for the future were limited.
H0er the ,ears se0eral niche /la,ers +egan to enter the mar(et/lace and
si/hon o1 s/eci2c mar(et sectors, +ut this was not considered a maFor /ro+lem
+ecause the com/an, was still generating signi2cant cash Low for the
+usiness and still had /lent, of mar(et share remaining. It was not until the
entire industr, as a whole +egan to fall o1 that signi2cant /ro+lems +egan
to surface.
4ri(ers for &$ange
$ecause $el:!on was all things to all /eo/le, the o/eration managed all
/roducts in e"actl, the same wa,. This, in turn, meant that the maForit, of
their /roducts had 0er, long lead:times com/ared to mar(et/lace requirements.
It also meant that management s/ent a signi2cant amount of time
e"/editing all /roducts through the facilit, in order to satisf, s/eci2c customer
deli0er, dates Cwhich were +eing missedD. It resulted in high unit costs
that were squeeIing /ro2ta+ilit, li(e ne0er +efore. In addition, $el:!on was
+eginning to recei0e less than fa0ora+le feed+ac( from customers through
su//lier Jscore cardsK and e0en encountered un/leasant customer site 0isits.
.0en though $el:!on had sta+le sales re0enues at the time, it was +ecoming
increasingl, o+0ious that that situation was not going to last unless
something changed. The con0e,er idler o/eration was facing hea0, com/etition
from multi/le sources. The, were a small /la,er in the mar(et/lace
and were tr,ing to com/ete on /rice and lead:time. A0aila+ilit, and s/eed
to mar(et were the com/etiti0e criteria that customers required, and the
com/an, was struggling to consistentl, satisf, this demand. In order for $el:
!on to regain mar(et share, the, needed to reduce lead:time on standard
/roducts to 20e da,s or less and maintain on:time deli0er, relia+ilit, of =;W
or +etter.
In addition to these mar(et forces for change, there were internal forces as
well. In late 7==@, $el:!on was acquired +, a new /arent com/an,. )hen the
e"ecuti0e management of the new /arent com/an, came to 0isit, the, found
an organiIation that was o/erating with 7=;4s /roduction ca/a+ilit,, sho/Loor
la,out, management structure, and organiIational culture, as well as a traditional
manufacturing /hiloso/h,. The, saw equi/ment that was not maintained,
manufacturing /rocesses that were laid out +, functional de/artment,
multi/le la,ers of management re/orting, direct la+or /iece:wor( incenti0es
Cremem+er, this was a union sho/D, and undisci/lined house(ee/ing /ractices.
Case St"&y 1+ 5ai3en6Base& %oc"se& %actory Pilot
766
It was clear that this o/eration needed to im/lement a signi2cant change in
its +usiness /ractices to +e com/etiti0e and satisf, new le0els of o/erational
/erformance. )ith +oth mar(et share and internal issues as the /rimar, dri0ers
for change, this organiIation (new it would ha0e to ado/t a di1erent a//roach
to manufacturing in order to +ecome a com/etiti0e entit,.
ProCect Background
In the s/ring of 7===, the new /arent com/an, +egan to roll out a strategic
/rogram focused on the de/lo,ment of lean manufacturing within the
cor/oration.
The /rogram was to +e rolled out through a series or Jwa0eK of
NaiIen e0ents and 6:da, lean classes. The lean classes were to +e utiliIed as
reinforcement for the (nowledge transfer of lean tools and techniques utiliIed
during the NaiIen e0ent. As the em/lo,ees +ecame more con2dent in their
use of the tools, the, would schedule other NaiIen e0ents and stri0e for
further continuous im/ro0ement and waste elimination within the facilit,.
In A/ril 7===, $el:!on hosted their 2rst NaiIen e0ent. Attendees from
se0eral other sister facilities were in0ited to /artici/ate and learn how to
im/lement the lean /rogram. $el:!on had identi2ed four indi0idual NaiIen
/roFects Corder administration, setu/, cell manufacturing, and assem+l, LowD
for the e0ent. All of these /roFects were selected with the idler /roduct line
in mind. This /roduct had se0eral o/erational issues relati0e to +oth
manufacturing
lead:times and e"cess in0entor,. It was felt that +, coordinating
se0eral /roFects along the same /roduct line s,nergies would de0elo/ +etween
the NaiIen /roFects, and this would ha0e the greatest im/act on the idler
+ottom:line /erformance.
In March 7===, the /resident of $el:!on had as(ed his management team to
select four /roFects for the u/coming NaiIen e0ent. The team loo(ed at their
o0erall +usiness, anal,Ied the /roduct demand 0olumes for each of the /roduct
grou/s, and re0iewed the o/erational /erformance of the two /rimar,
/roduct lines, con0e,er idlers and engineered chain.
The team selected the idlers +ecauseB
7. The, re/resented a74 million of sales Cnearl, 7;W of all re0enuesD.
3. Production of the idlers was alread, self:contained, with all the manufacturing
/rocess on one side of the +uilding.
76?
5. There was signi2cant o//ortunit, to im/ro0e /erformance with limited
ris(.
6. The engineered chain /roduct line in0ol0ed a greater num+er of /art
num+ers, a signi2cant mi" 0ariet,, and common resources and equi/ment,
and most of the fa+rication equi/ment was not surfacemounted
Cmeaning that redesign or rearrangement would require
digging and /ouring new concreteD. In addition, most of the utilities
were laid in the concrete Looring.
The /roFect sco/e im/acted con0e,er idler /roduction from incoming
raw material to shi//ing. The manufacturing /rocesses included forming,
welding, assem+l,, and /ainting. The /roFect o+Fecti0es includedB
7. !educe in0entor, le0els from a334( to a7@4( C34WD.
3. Achie0e on:time deli0er, /erformance of =;W or +etter.
5. !educe manufacturing lead:time to ; da,s or less.
6. !educe changeo0er times +, ;4W.
;. Im/ro0e s/ace utiliIation.
?. Im/ro0e res/onsi0eness through Le"i+ilit,.
ProCect Approac$
$efore the NaiIen e0ent was scheduled, /artici/ants from sister com/anies
were in0ited to attend the wee(:long NaiIen e0ent. The o+Fecti0es were twofoldB
C7D introduce the /artici/ants to the NaiIen a//roach, and C3D ha0e the
/artici/ants +ring an outsiderPs /ers/ecti0e to $el:!on. The teams were
sta1ed with mem+ers that re/resented multi:functional +ac(grounds and
included sho/ su/er0isors, o/erators, union stewards, engineers, managers,
etc. $, using cross:functional teams, the statement, JThatPs the wa, we ha0e
alwa,s done things,K could more easil, +e challenged.
The NaiIen e0ent was (ic(ed o1 on the 2rst da, with a full da, of training
and education. This training consisted of a mi"ture of lecture, e"ercises,
discussion, and simulations. The content addressed the o0erall NaiIen /rocess,
the schedule for the wee(, and the introduction to se0eral lean tools
and techniques Ce.g., one:/iece Low, Nan+an, SM.*, TPM, loading charts,
/rocess ma//ing, Po(a:,o(eD.
The o/erational /rocesses for /roducing and deli0ering the con0e,er idler
/roduct line were di0ided among four teams. Hn the second da,, each team
had to clarif, its sco/e and o+Fecti0es, ma/ the current /rocess, and gather
76@
+aseline o/erational /erformance data. Hnce the, had collected all the data
and s/ent time anal,Iing the current /rocess, the, were facilitated through
a +rainstorming e"ercise +, the team leader in order to de0elo/ o/tional
solutions to satisf, the agreed u/on o+Fecti0es. Hnce the new design was
agreed u/on, it was turned o0er to maintenance and s(illed craft to +egin
relocating +ins, rac(s, and equi/ment.
$, the end of the third da,, the cell area had had enough equi/ment
rearranged to demonstrate the Low of the new /rocess and recogniIe signi2cant
gains in the area of manufacturing lead:time and in0entor, reduction.
H+0iousl,, the in0entor, was still there, +ut the, had designed a new
manufacturing
Low that would not require the e"cess wor( in /rocess that was
currentl, a0aila+le. -inall,, the teams generated a 54:da, Jto doK list to
manage the remaining outstanding acti0ities Ce.g., ordering weld curtains,
+leeding o1 in0entor,, running utilit, linesD.
$etween Ma, 7=== and March 3444, $el:!on scheduled a series of followu/
NaiIen e0ents in such areas as SM.*, ;S house(ee/ing, and Nan+an to
sustain the gains and (ee/ /rogress mo0ing forward. These mini:NaiIen
/roFects were used to continuall, reinforce the /rinci/les of lean and
demonstrate
to the wor(force that $el:!on was serious a+out utiliIing this
a//roach to im/ro0e the +usiness.
Se0eral of the 2rst SM.* NaiIen /roFect ideas came from the original 6:
da, NaiIen e0ent. The 54:da, Jto doK list /ro0ided some initial insight as to
what equi/ment and /rocesses needed to +e addressed. Teams for the later
SM.* NaiIen /roFects were sta1ed with a cross:functional re/resentation of
em/lo,ees from across the /lant. Most of the teams were sta1ed with the
manufacturing manager, equi/ment o/erators, /roduction engineer, tooling
engineer, and a manufacturing re/resentati0e from the engineered chain
/roduct line. H0er the course of the ne"t 74 months, the, conducted se0en
SM.* NaiIens Ca0eraging a+out one e0er, ? wee(sD. The, addressed welding
2"tures, shears, shaft /roduction, roll cuto1s, angle shear o/erations, die
consolidation, and the de0elo/ment of a die:e"change s,stem. These e1orts
signi2cantl, contri+uted to the reduction of lead:time and increased Le"i+ilit,
within the idler /roduction area.
As the idler team +ecame more con2dent in their NaiIen a//roach, its
lean e1ort +ecame much more of a self:/er/etuating situation. !ather than
formall, scheduling a set num+er of NaiIens /er month or quarter, management
let the team decide when, where, and how man, the, were going to
conduct. )hen the 2rst mini:NaiIen e0ent was initiated, the team was s(e/tical
as to whether this initiati0e was going to lastM howe0er, after the e0ent
was 2nished and the, saw how much was accom/lished and how management
7?A
was actuall, listening and reacting to their recommendations, the grou/ was
energiIed. $etween Gul, 7=== and March 3444, the idler o/eration conducted
no less than nine mini:NaiIen e0ents Cin addition to the SM.* NaiIensD.
These mini:e0ents focused /rimaril, onB
7. ;S house(ee/ing Cto throw out unnecessar, items and identif,
required itemsD
3. -reeing u/ Loor s/ace Cto im/ro0e the Low of material, allow /ointof:
use deli0er, for <;W of raw materials, and im/ro0e the a+ilit, to
/erform line:of:site managementD
5. ross:training Cto increase res/onsi0eness and Le"i+ilit, within the
unitD
6. Limiting and controlling in0entor, Cto esta+lish same:da, deli0er,
/erformance on the to/ si" high:0olume /roducts and reduce leadtime
through the manufacturing area +, remo0ing e"cess wor( in
/rocessD
These:mini e0ents hel/ed to sha/e the focus and direct the energies of the
idler team toward constant continuous im/ro0ement.
The team went +e,ond Fust factor, rearrangement and Low. In Hcto+er
7===, the team recei0ed a//ro0al to address the Low of material and
im/lemented
a Nan+an re/lenishment s,stem. The, started to im/lement the
s,stem at the /oint of su//l, for raw materials. The team anal,Ied the raw
material and com/onents /arts Low, determined demand +eha0ior for usage,
and identi2ed 0endors of the material. In *ecem+er 7===, the teams selected
four 0endors with whom to de0elo/ o/erating rules and /ilot the im/lementation
of Nan+an for 36 /arts. The, de0elo/ed a 0isual Nan+an /rocess that
utiliIed a Jfa"+anK as the re/lenishment signal +etween the su//lier and the
customer. The a//roach wor(ed out so well that +, March 3444 the, had si"
di1erent 0endors on Nan+an for 55 indi0idual /arts. In the same month,
the, were a+le to turn on a Nan+an re/lenishment s,stem for a s/eci2ed le0el
of 2nished goods, there+, allowing them to +uild to the demand of a 2nished
Nan+an signal.
HrganiIationall,, changes were made within the idler /roduct line that
were /recursors to the esta+lishment of the focused factor, conce/t. Initiall,,
$el:!on was de/lo,ing lean tools and techniques on the sho/ Loor
through NaiIen e0ents. In order to esta+lish ownershi/ for the e1ort and
maintain continuit,, it made sense to assign someone to manage the o0erall
/roFect, /articularl, now that all the manufacturing /rocesses were collected
together in a cell. This manager had ownershi/ for the /eo/le, re/orted on
7?7
/erformance, and facilitated the lean acti0ities. $el:!on used this e"/erience
and the associated lessons learned from this /ilot focused factor, as the
model for other focused factories that were designed and im/lemented
throughout other areas of the facilit, during the +alance of calendar ,ear
3444.
ProCect "ime 'ine
"ec$ni%ues .tili!ed
Milestone Plan
GH@@ MH@@ AH@@ ?FH@@ FJHFF
NaiIen e0ent
is initiated
-irst SM.*
NaiIen is
conducted
Mini:NaiIens
are launched
Nan+an
s,stem is
a//ro0ed
Nan+an
s,stem is
functional
Hne:da, SM.* NaiIen Process ma//ing, 0ideota/e, internal 0s.
e"ternal setu/, one:touch methodolog,,
/arallel functions C/it crewD
Lean manufacturing
CNaiIen e0entD
Lean manufacturing
C6:da,D
cross:training
7?:
Bene)ts Ac$ie(ed
'essons 'earned
A
Assign ownershi/ for /rocess im/ro0ement along an entire /roduct
famil,. This remo0es the functional silo 0iew of /ro+lems and assigns
accounta+ilit, for /erformance im/ro0ement to one /erson and his
or her team. This organiIational change will signi2cantl, im/act how
quic(l, /roFect o+Fecti0es are achie0ed.
A
Understand the o0erall +usiness /lan and where resources ha0e /re0iousl,
+een allocated +efore launching a lean manufacturing e1ort.
onLicts in +usiness /riorities and confusion a+out o/erational focus
will arise if this issue is not addressed.
A
MinimiIe e"/osure, mitigate ris(, and o+tain results to hel/ re0eal
cause:and:e1ect relationshi/s +, utiliIing /ilots and a//l,ing the
lessons learned.
A
Identif, the cell leader as earl, in the /rocess as /ossi+le to ha0e time
to assign ownershi/ for the new manufacturing /rocess.
A
Machine o/erators are often the /rocess e"/erts and a great source
of ideas for setu/ reduction /roFects.
A
Ha0e a dedicated team C/roFectD leader for the transformation to lean
manufacturing. The +alance of the /roFect team should +e dedicated
at least ?4W of the time.
A
Address the issue of cultural change. ommunicating the Jneed for
changeK is /aramount to achie0ing su//ort for the new wa, of doing
+usiness.
A
-ollow through on all /lanned commitments and demonstrate results
Ce0en those that were less than successfulD. This +uilds trust throughout
the organiIation and su//orts the Jwal( the tal(K mentalit,.
Metric Baseline Act"al =FJHFF> Target
Hn:time deli0er, @;W =;W =;W
Manufacturing
lead:time
?[75 da,s 5[? da,s ; da,s or less
In0entor, le0el
Craw materialsD
a334( a764( a7@4(
Setu/ reduction @@ minutes 34 minutes 66 minutes
S/ace utiliIation 6=,?44 ft
3
6@,=44 ft
3
6@,444 ft
3
7?<
"estimonials
JNaiIen wor(ed out well. )e wor(ed together, had good results, and
reduced setu/ time. )e need to continue this e1ort to get more done.K
BSho)Noor 2)erator
JI was 0er, enthusiastic in the +eginning and saw some of m, ideas
im/lemented, +ut then it sto//ed and I +ecame discouraged. Small quantities
are hard to get used to.K
BSho)Noor 2)erator
JIt is necessar, to ha0e all /arties on the same /age Cmanagement,
su/er0ision, o/erators, etc.D, and it is 0er, im/ortant that the decisions
of the team can +e im/lemented, without signi2cant management
inter0ention.K
BPro&"ction Planner
7?5
7>
&ase Study E:
Assem2ly Production
.nit ProCect
&ompany Pro)le
ust outside the cit, limits of downtown Houston is a /roducer of industrial
a//lication +earing /roducts called A9 $earing. A9 $earing +egan
o/erations in 7=;= and has o/erated as a union facilit, with a total
em/lo,ee head count of ;;4, of which 63; are mem+ers of the local 77?4.
The facilit, occu/ies ;44,444 square feet, including administrati0e oUces.
The o/eration has followed a traditional manufacturing la,out, with indi0idual
de/artments segregated +, /roduction /rocess with su/er0ision
assigned accordingl,. The /rimar, manufacturing /rocesses ha0e included
/ainting, grinding, turning, heat:treating, and manual and automated assem+l,
of +earings.
H0er the course of the last ; ,ears, A9 $earing had +een a+le to consistentl,
sustain to/ line re0enue in the range of a=4 to a744 million /er ,ear.
The com/an, has +een 0er, /ro2ta+le and successful at deli0ering on customer
needsM howe0er, unit /ricing /ressures, ca/acit, constraints on some
assem+l, lines, lac( of manufacturing Le"i+ilit,, and e"cessi0e in0entor,
le0els ha0e made it diUcult for A9 $earing to im/ro0e the o0erall /erformance
of its o/eration.
M
7?>
4ri(ers for &$ange
Hne of the issues surrounding the im/lementation of change at A9 $earing,
was the fact that the, were ma(ing good /ro2ts. Their margins were 0er, good
for their industr,, their re0enue line was sta+le, and the, had +een a+le to
satisf, /roduct a0aila+ilit, requirements of customers through the utiliIation
of a national distri+ution warehouse s,stem. In addition, as mentioned earlier,
this was a union sho/ that had not e"/erienced a great deal of change in recent
histor,. Under the e"isting contract, union mem+ershi/ was a+le to ma(e
good mone, through indi0idual /iece:rate incenti0e and were not reall,
interested
in altering that course. This +usiness scenario /resented a 0er, diUcult
situation in which to initiate a change /rogram. )hen an organiIation is not
in /ain and has +een ma(ing good mone, for se0eral ,ears, it is diUcult to
see a need to change how the +usiness is run.
Although the need for change was not 0isi+le 2nanciall,, it was e0ident
o/erationall,, and for A9 $earing the need for change came from se0eral
sources. The initial or /rimar, dri0er came from the new /arent com/an,
that now owned A9 $earing. The /arent com/an, had +egun to launch an
im/ro0ement initiati0e across all of its facilities and was e"/ecting all of its
com/anies to /artici/ate. The second dri0er came from the /resident of A9
$earing who recogniIed that man, of the issues that were not 0isi+le at the
to/ line were nonetheless e"tremel, 0isi+le at the +ottom line Ce.g., constant
o0ertime, e"/edited deli0eries, signi2cant management inter0ention, e"cess
in0entor,D. All these issues were 0isi+le at the sho/ Loor and 0er, familiar
to those who ran the o/erations side of the +usiness.
In addition to these internal forces, when re/resentati0es of the new /arent
com/an,Ps e"ecuti0e management came to 0isit, the, made se0eral comments
a+out this facilit, utiliIing the /rinci/les of lean manufacturing to im/ro0e
the o/eration. These sources of change were the /rimar, dri0ers +ehind wh,
A9 $earing launched a lean manufacturing initiati0e within their organiIation.
ProCect Background
The lean manufacturing e1ort for A9 $earing oUciall, (ic(ed o1 in Se/tem+er
7===. The /lant manager and his sta1 identi2ed four indi0idual
/roFects to +e im/ro0ed during a one:wee( NaiIen e0ent. The /roFects co0ered
a wide range of to/ics CNan+an, setu/ reduction, cellular manufacturing,
and /roduct LowD. These /roFects were selected +ecause of the +usiness need
to +uild con2dence throughout the organiIation with the use of the NaiIen
Case St"&y + Asse!bly Pro&"ction .nit ProKect
7?6
/rocess and to quic(l, /roduce se0eral successful im/ro0ements. $aseline
/erformance target sheets were created for each of the indi0idual /roFects
and demonstrated im/ro0ements were recorded on the sheets.
.ach of these /roFects did achie0e some le0el of success and /ro0ided a
(ic(:start for the lean /rogram. H0er the ne"t se0eral months, more NaiIen
e0ents were scheduled for s/eci2c to/ics such as SM.*, TPM, etc., and /roFect
teams were launched across the factor, to focus on these s/eci2c /roFects. $,
&o0em+er 7===, it was +ecoming o+0ious that after three months of e1ort
on the lean /roFect, not much was changing on the +ottom line. Man, good
things were ha//ening. Peo/le were 2"ing equi/ment, changeo0er times on
machines were coming down, and the manufacturing areas were loo(ing more
organiIed, +ut an, im/act on the +ottom line was diUcult to demonstrate
and this was +ecoming a source of frustration to all em/lo,ees in0ol0ed with
the lean initiati0es.
In an e1ort to /ro0ide focus and demonstrate a +ottom:line im/act, it
was determined that an e1ort should +e launched directl, aimed at the
+earing assem+l, o/eration. A signi2cant o//ortunit, for im/ro0ement
resided in assem+l,, and it was the manufacturing /rocess closest to the
customer. Suoted lead:times to customers were in the neigh+orhood of 5
wee(s, and wor(:in:/rocess in0entor, le0els +etween assem+l, and fa+rication
were a<.; million in Fust com/onent /arts.
A team was selected and dedicated to this lean /roFect for the /ur/ose of
esta+lishing what is called, for all intents and /ur/oses, an assem+l, /roduction
unit. An assem+l, /roduction unit is an organiIation design +ased
around cells. Hwnershi/ for /roduct /erformance is assigned to cells for the
customers the, ser0eM howe0er, ownershi/ is not Jcradle to gra0eK li(e that
of a focused factor,. A focused factor, has ownershi/ from raw materials to
2nished goods. An assem+l, /roduction unit onl, has ownershi/ +ac( to a
wor(:in:/rocess stores location for com/onent /arts. Unli(e de/artments,
which are usuall, organiIed for s/eci2c /rocesses, a /roduction unit has total
res/onsi+ilit,, accounta+ilit,, and authorit, C!AAD for the /roducts from
wor(:in:/rocess stores to the 2nal customer. The teamPs o0erall mission was
to im/lement as man, lean /rinci/les in assem+l, as required to +ring a+out
a +ottom:line change in o/erational /erformance.
In &o0em+er 7===, A9 $earing mo+iliIed this full:time lean team to design,
de0elo/, train, and im/lement a lean manufacturing en0ironment in assem+l,.
7??
This team was sta1ed with three em/lo,ees, all of whom concentrated their
collecti0e energies on the lean initiati0e. To gi0e the /roFect some structure
and a logical sequence for im/lementation, and to generate a /ositi0e
im/ro0ement
as soon as /ossi+le, the, identi2ed the ."cel $earing /roduct famil, as
the 2rst assem+l, area on which to focus their e1orts. The ."cel $earing
/roduct line had +een +rought into the A9 $earing facilit, in Gul, 7=== after
the /lant closure of a sister /lant. The ."cel $earing /art num+ers, tooling,
and qualit, requirements were all unfamiliar to the A9 $earing em/lo,ees.
The manufacturing /rocess documentation was limitedM therefore, the training
of new o/erators was diUcult. In addition, ."cel $earingPs /roduct had
+een set u/ to +e assem+led in a +atch:and:queue mode, not a one:/iece Low
cellM therefore, it was not sur/rising that the ."cel $earing assem+l, lines in
the A9 $earing facilit, were not /roducing at the le0el of out/ut required to
satisf, customer demand. *emonstrated out/ut was a+out 5;44 +earings /er
da, across the four assem+l, lines on two shifts. The required out/ut was ;444
+earings /er da,, and that was not +eing met e0en with o0ertime on Saturda,
and Sunda,. The o+Fecti0e was to de0elo/ and de/lo, a lean manufacturing
en0ironment that was a+le to satisf, a customer demand le0el of <444 units
/er da, o0er a ;:da, wor( wee( without o0ertime.
ProCect Approac$
In the middle of &o0em+er, the lean team recei0ed training on change
management
/rinci/les, team mo+iliIation a//roaches, and /roFect management
fundamentals. It was recogniIed earl, on that the team mem+ers had limited
e"/erience with managing /roFects. It was also a//arent to the team that an
organiIation that did not recogniIe a need for change was not going to +e
eas, to changeM therefore, the team o/ted to follow the structured /roFect
management a//roach outlined in their training.
The team de0elo/ed an agreed:u/on charter and milestone /lan outlining
their /roFectPs sco/e and o+Fecti0es. The team limited the /roFect sco/e to
Fust ."cel $earing assem+l,, and their o+Fecti0es were to achie0e one:/iece
Low manufacturing on the +earing assem+l, lines with im/ro0ed through/ut,
/roducti0it,, reduced qualit, /ro+lems, and reduced in0entor, le0els.
$etween the initial launch of the /roFect in &o0em+er 7=== and -e+ruar,
3444, the lean team had a diUcult time getting started and showed signs of
signi2cant frustration. A formal re0iew of the /roFectPs /rogress unco0ered
the following issuesB
7?@
7. $, conducting a $el+in role assessment on the team mem+ers, it was
learned that none of the team mem+ers had a strong im/lementer
role /reference, which is crucial for a lean manufacturing /roFect. It
was determined that the /roFect leader /referred the role of Js/ecialist,K
which led to diUcult, focusing se0eral of the team mem+ers.
3. The /roFect team was e"/eriencing diUcult, getting launched in a
direction and then sta,ing the course. There was a signi2cant amount
of confusion as to who was to do what and what direction the /roFect
was su//osed to +e ta(ing.
5. The /roFect was +eing controlled in an informal manner, without
regular re/orting and formal status re0iews with the /roFect team.
6. The lean manufacturing /roFect for assem+l, was launched with a
/roFect owner who was not a+le to dri0e the /roFect. !egular re/orting
of /rogress was not requested, and the owner was not reall, engaged
in monitoring the /roFectPs /rogress.
;. The lean team had +een e"/eriencing diUcult, in getting the sho/Loor
o/erators to consistentl, wor( with the lean a//roach. )hen
the lean team was out on the sho/ Loor, the areas could /erform
e"actl, as designed. )hen the team was a+sent, /erformance fell o1.
It was determined that +u,:in and ownershi/ for the new lean manufacturing
design and wa,s of doing +usiness had not reall, ta(en
/lace for those who actuall, owned the /rocess, namel, the sho/Loor
/ersonnel and their su/er0isors.
?. There was a lac( of de2nition as to who had what role and res/onsi+ilit,
for the design, de0elo/ment, and su+sequent im/lementation
of the lean /roFect. This was one of the /rimar, reasons a lac( of
coo/eration e"isted +etween the lean team and the sho/Loor management,
who were the targets for the change.
<. It was diUcult to tell when a cell was actuall, im/lemented. The
criteria for success or targeted le0els of /erformance were not clear,
not communicated, and not trac(ed.
@. It was disco0ered +, the lean team that much of the tooling and some
of the equi/ment +eing utiliIed +, the o/erators were not ca/a+le of
/roducing a good:qualit, /roductM therefore, the /roFect was set +ac(
a few wee(s to identif, and correct the sus/ect tooling.
=. The a0erage num+er of ,ears of A9 $earing wor( e"/erience for frontline
su/er0ision was 35 ,ears. Man, of these front:line managers had
ne0er wor(ed outside the e"isting /lant and therefore were not aware
of an, other wa,s to conduct +usiness.
7@A
After some length, discussion +etween the /roFect team and the steering
committee, the following course of action was decided u/onB
7. The /roFect sco/e should +e e"/anded to co0er the end:state 0ision
for assem+l, and the remaining /roduct lines in assem+l,. The initial
im/lementation e1ort should remain focused on ."cel $earing, +ut
an end:state conce/t should +e de0elo/ed for the assem+l, /roduction
unit. In addition, a ,ear 3444 game /lan for achie0ing the conce/t
needed to +e generated. This schedule was to ha0e assigned actions
with dates and a descri/tion of deli0era+les.
3. A new /roFect owner was to +e assigned who had a greater 0ested
interest in the successful outcome for the /roFect and would dri0e it
to com/letion.
5. The /oor:condition tooling would +e identi2ed and scheduled for
reconditioning in a timel, manner.
6. The lean team was to engage the sho/ foreman C/rocess ownerD in
the design e1orts so that the new /rocess would ha0e +u,:in and the
hando1 during im/lementation would +e seamless. The lean team
was to +e /hased out of the ."cel $earing assem+l, area when the
sho/ too( charge of de/lo,ment. Hnl, after all e"it criteria had +een
satis2ed could the lean team disengage com/letel,.
;. The lean team was to de0elo/ a formal /roFect management /rotocol
for controlling the /roFect +, esta+lishing a war room, meeting on a
regular +asis, conducting /roFect status re0iew meetings, and re/orting
on /erformance metrics regularl,.
?. To engage the entire em/lo,ee wor(force, /articularl, the front:line
su/er0isors, an o0erall lean /roFect announcement was to +e deli0ered
to the entire em/lo,ee /o/ulation.
<. The lean team was to conduct a formal NaiIen e0ent to oUciall, (ic(
o1 the de/lo,ment of the ."cel $earing assem+l, lines and /h,sicall,
mo0e to the sho/ Loor during the im/lementation to show su//ort
for the im/lementation issues.
*uring the month of March 3444, these changes in course for the /roFect
were incor/orated and the results were tremendous. The new /roFect leader
+egan enforcing disci/line with regard to the new lean /rocesses, and
im/ro0ed le0els of /erformance were +eing sustained in the ."cel $earing
assem+l, cells. Metrics were re0iewed in the war room and u/dated on a
wee(l, +asis. The /roFect team met on a +i:monthl, +asis to re0iew /roFect
7@7
status with the steering committee and on a dail, +asis with the /roFect owner
during the im/lementation of an assem+l, cell NaiIen e0ent.
In addition to the shorter term initiati0es, the lean team de0elo/ed an
end:state 0ision for assem+l, and /roduced a game /lan that im/lemented
all /roduct lines in the assem+l, /roduction unit +, the ,ear 3447. These
assem+l, cell designs were +ased on the same /rinci/les as those of the ."cel
$earing assem+l, cells in order to +uild on the lessons learned and e"/erience
gained with the /ilot im/lementation.
ProCect "ime 'ine
Milestone Plan
EHFF JHFF GHFF LHFF
Lean team is
mo+iliIed
'ear 3444
im/lementation
/lan is a//ro0ed
."cel $earing
cells three and
four are sta+le
."cel $earing
cells one and
two are sta+le
7@:
"ec$ni%ues .tili!ed
Program and /roFect
management
mechanisms
hange management ommunications /lanning, reaction to
change, resistors
Team mo+iliIation $el+in roles, conLict management,
decision ma(ing
Lean manufacturing
C-i0e Primar, .lementsD
routing anal,sis
Lean manufacturing
CNaiIen e0entD
Lean manufacturing
C6:da,D
wor(, wor( element anal,sis,
;S house(ee/ing, muda, /rocess
ma//ing, Nan+an, HeiFun(a, Po(a:,o(e,
TPM, H.., +ig si" losses, Fo+ instruction
training, cross:training
7@<
Bene)ts Ac$ie(ed
'essons 'earned
A
Assign true full:time team mem+ers, not a roster of team mem+ers
who still ha0e other res/onsi+ilities. This is critical to sustaining a
common focus.
A
larif, roles with all /roFect /artici/ants so that all /arties agree to
what the, are tr,ing to achie0e, who is to do what, and what success
loo(s li(e when the, get there.
A
.sta+lish a regular, formal /roFect re0iew /rocess earl, in the /roFect
to control the /roFect and (ee/ it on schedule. )hen haIards or sli/s
in the schedule arise, the, must +e escalated according to the /rotocol
and addressed immediatel,.
A
Process owners Cthose who own the /rocess +eing changedD must +e
engaged in the /roFect and commit to the new wa, of doing +usiness
+efore im/lementation.
A
The /roFect owner must +e engaged in the /roFect and has to /ro0ide
the leadershi/ and dri0e for the /roFect to +e successful.
A
The roles and res/onsi+ilities of e0er,one in0ol0ed in the /roFect must
+e de2ned, understood, agreed u/on, and documented.
A
learl, de2ne e"/ectation and /erformance targets at the +eginning
of the /roFect. It is im/erati0e that all /arties in0ol0ed are of one mind
as to what a successful /roFect loo(s li(e and how it is to +e achie0ed.
A
The utiliIation of $el+in team roles can /ro0ide signi2cant insight
into the a//ro/riate structure and /otential wea(nesses of the team
ma(eu/.
Metric Baseline
Act"al
=FGHFF> Target
Parts /er manhour ?.6 @.; 73.4
Production out/ut ;5W <7W 744W
*ail, scheduled hours ?? 6= 64
*efects /er million ?<;@ 3?6? <44
Hn:time deli0er, ;;W @@W =;W
7@=
"estimonials
JI +elie0e changes will ha//en. )e can get some things done.K
BSho)
Manager
J)e ha0e to (ee/ one:/iece Low for qualit,.K
BPlant Manage!ent
JIt is im/ortant to ha0e all areas of the /lant wor(ing toward a common
+ottom:line goal 0s. indi0idual initiati0es.K
Bngineering Manager
J)e disco0er /ro+lems more quic(l,. Production scheduling is easier.
Sualit, is +etter due to the mo0e toward one:/iece Low. )hen we ma(e
a mista(e, onl, a few /arts are a1ected and the /ro+lem is usuall, caught
right awa,. Hne:/iece Low also +rea(s u/ the monoton, of +atch wor(
E I used to +e an assem+ler in the +atch en0ironment. The Nan+an
ensures that we ha0e our /arts a0aila+le when needed. At ."cel, we had
a cri+ attendant that would deli0er our /arts. )e were alwa,s waiting on
/arts.K
BLine Lea&er
JThe Nan+an ma(es it eas, for me to get /arts. The quic(:change tooling
is a good idea. I do not ha0e to loo( for Allen wrenches an,more. La+eled
tooling at the /ress sa0es me time E I donPt ha0e to search for tooling
that is la+eled. I want to do a good Fo+ e0er, da,, +ut I get frustrated
when /ro+lems arise. XIt is diUcult to do four:/iece Low on a line e0en
if we ha0e Fust one /ro+lem X it forces us +ac( in a +atch mode.K
B2)erator
7@5
7>
&ase Study ;:
,ig$3+olume
and 'o-3+olume
&ell ProCect
&ompany Pro)le
ithin a ?4:mile dri0e of Los Angeles is a /roducer of /recision
+earing /roducts called Monitor $earing. Monitor $earing +egan
o/erations at this site in 7=<6. The, ha0e functioned as a nonunion
facilit,, with a//ro"imatel, 3=4 em/lo,ees on the /a,roll. The o/eration
co0ers 344,444 square feet and has followed a more traditional factor,
la,out. The (e, manufacturing /rocesses are cold:forming, screw machining,
grinding su/er:2nishing, and automated and manual assem+l,.
In 7==<, Monitor $earingPs sales /ea(ed at a56 million of to/:line re0enue.
The /rimar, mar(ets the com/an, ser0es are hea0,:dut, truc(, construction,
and industrial. The +alance of their ser0ice /roducts ha0e +een handled
through a cor/orate distri+ution warehouse s,stem. Historicall,, the com/an,
has +een successful at deli0ering to customer needsM howe0er, e0er:increasing
/ricing /ressures, ca/acit, constraints, more stringent /roduct a0aila+ilit,
requirements, and customer change orders ha0e +een ma(ing it diUcult for
Monitor $earing to continue o/erating in the same manner as the, had in
the /ast. .1orts had recentl, +een made to de/lo, continuous im/ro0ement
initiati0es within the facilit,, +ut these met with limited success. .0en though
some in0estment in ca/ital had +een made and the com/an, achie0ed some
*
7@>
+ene2t, from a traditional cost:sa0ings /ers/ecti0e, the, had ,et to realiIe an,
+ene2t from the in0estment in a lean manufacturing initiati0e.
4ri(ers for &$ange
Hne of Monitor $earingPs maFor customers /urchased se0eral high:0olume
+earings for its truc( transmission manufacturing o/eration. -or as long as
the, had +een in +usiness together, this customer had /laced orders with
Monitor $earing in a 0er, lum/, demand /attern +ut alwa,s with 73: to
7?:wee( 2rm schedules. )ithin a relati0el, short time /eriod, though, the
H.M customer switched from a traditional 2rm 2"ed schedule to a demand
for /arts +ased on a scheduled 2nal assem+l, sequence. This, in turn, caused
schedules to change dramaticall, from 73 to 7? wee(s 2rm 2"ed to @ da,s
2rm with changes and the Le"i+ilit, necessar, to accommodate wee(l,
adFustments, which were at times quite signi2cant. Their demand /attern
characteristicall, had large quantities at the +eginning of the month and
then little at the end of the month. These dramatic changes in demand
+eha0ior /atterns created ha0oc on the /roduction Loor, not to mention the
fact that it was a more costl, wa, in which to conduct +usiness. Soon after
the schedule changes, the customer +egan /ressuring the com/an, a+out its
unit costs and /roduct a0aila+ilit,. In addition to this e"ternal force for
change, there was an internal force as well. A new /arent com/an, was
launching a strategic im/ro0ement initiati0e aimed at reducing costl, waste
CJmudaKD throughout all of its facilities and was e"/ecting all of its com/anies
to /artici/ate. The com+ination of these two dri0ers, one internal and
one e"ternal, is what dro0e Monitor $earing to em+ar( on a new a//roach
to manufacturing.
ProCect Background
Monitor $earing had a 0ariet, of /roduct:demand 0olumes for its 0arious
/roduct lines. Some of the /roducts demonstrated a 0er, high demand 0olume
Ce.g., 5444 units /er da,D, and some a 0er, low demand 0olume Ce.g.,
3444 units /er ,earD. To de0elo/ some momentum for their im/ro0ement
initiati0e and to arrest the deterioration of the relationshi/ with one of their
/rimar, customers, Monitor $earing decided their highest 0olume /roduct
line should +e the 2rst area attac(ed. This would gi0e them a chance to
Case St"&y %+ (igh6'ol"!e an& Low6'ol"!e Cell ProKect
7@6
channel their energies on one s/eci2c /roduct famil, and de/lo, the lean
techniques rather quic(l,.
.0en though the, realiIed demonstrated +ene2ts from a//l,ing lean
manufacturing techniques to the high:0olume /roducts, the, recogniIed
that this focus on high:0olume /roduct lines onl, im/acted a+out 54W of
salesM therefore, the, needed to in0estigate other o//ortunities as well. This
meant ste//ing +ac( and loo(ing at the demand /atterns of all their enditem
/roducts and segregating them +, some common factor C0olume, mar(et,
customer, material, etc.D. In doing so, the com/an, concluded that, for
their manufacturing en0ironment, the most a//ro/riate choice would +e to
sort the /roducts +, /roduct siIe 2rst and then +, 0olume, which was
de/endent on equi/ment ca/a+ilities. $, doing so, the, were a+le to di0ide
their entire end:item assem+l, area into four maFor /roduct familiesB C7D
high:0olume +earings, C3D medium: to low:0olume +earings, C5D larger siIe
+earings, and C6D low:0olume ser0ice. The high:0olume +earings encom/assed
nine end:item +earingsM the medium: to low:0olume +earings, ?<
end:item +earingsM the large siIe +earings, o0er 644 0arious end:item +earingsM
and the low:0olume ser0ice, in e"cess of ;44 end items. This segregation
of /roduct +eha0iors allowed the com/an, to design and manage the Low
of material through assem+l, according to the demand +eha0ior its the
/roducts.
Initiall,, the o0erall /roFect sco/e and o+Fecti0es for the lean im/ro0ement
initiati0e at Monitor $earing were /rett, much unde2ned. The com/an,
(new that the, had to achie0e im/ro0ed /erformance and that the, had to
engage themsel0es with the /arent com/an,Ps strategic e1ort to eliminate
waste. It was Fust a matter of understanding the tools and ha0ing the
organiIation
required to ma(e the change.
Monitor $earing (new the, were e"/eriencing diUcult, with one s/eci2c
customer and that the lean tools and techniques the, were learning a+out
would +e a//lica+le to an, of the high:0olume cells. So, in an e1ort to
esta+lish a course and set a direction for the com/an,, Monitor $earingPs
general manager formulated a target o+Fecti0e in Ma, for three of the identi2ed
high:0olume cellsB JIn0entor, turns of 73 are to +e achie0ed +, each
of these cells +, the end of the ,ear b*ecem+er 7===c. After the end of the
,ear, we will determine a /lan of action for the +alance of the /roducts.K
7@?
ProCect Approac$
Monitor $earing oUciall, (ic(ed o1 their e1orts in Gune 7===, with four
NaiIen e0ent /roFects Corder entr,, su//lier Nan+an, cellular manufacturing,
and /roduct LowD. These /roFects were selected +ecause the, centered around
a need to streamline the Low time from customer order to shi/ment for
high:0olume +earing /roducts that were currentl, in /roduction. Monitor
$earing was facing signi2cant cost reduction and on:time deli0er, /ressures
from its /rimar, customer and needed to demonstrate im/ro0ement quic(l,.
*uring the course of the e0ent, each of these /roFects did achie0e 0ar,ing
le0els of success and /ro0ided the (ic(:start necessar, for the lean im/ro0ement
initiati0e at Monitor $earing. The high:0olume +earing cell was a+le
to achie0e a signi2cant im/ro0ement in out/ut from +etween 7344 and 7;44
units /er da, to the 3444 /er da, that were required. The, achie0ed this +,
anal,Iing the Low of material, understanding the wor( content, and +alancing
the wor( +etween stations. In addition, +, im/lementing small +atch
Low and Nan+an /ull, the, were a+le to not onl, im/ro0e in0entor, turns
from ;.5 to 73.5 +ut also arrest a nagging qualit, /ro+lem that was causing
them to lose around a;444 /er month in the form of scra//ed /arts.
As the following months /assed, more NaiIen e0ents were scheduled and
im/ro0ement teams launched across the factor,. A tremendous amount of
acti0it, ensued around /lant:wide 0isual communication of conce/ts, team
accom/lishments, ;S house(ee/ing, equi/ment clean:u/, and im/lementation
of Nan+an re/lenishment for man, of the /urchased and manufactured
/arts in +oth assem+l, and fa+rication. Some /lant:wide e1orts were initiated
relati0e to single:minute e"change of dies CSM.*D, which focuses on reducing
changeo0er time, and total /roducti0e maintenance CTPMD, which focuses on
the reduction of un/lanned downtime on equi/ment.
$, Se/tem+er 7===, it was +ecoming e0ident that the ne"t areas of
im/ro0ement within the facilit, were going to +e more com/le" and that the
NaiIen /roFects a//roach of Jislands of acti0it,K used so far was not going
to address some of the more su+stantial +usiness issues necessar, for success.
So, Monitor $earing announced the de/lo,ment of a full:time lean team to
focus on the design, de0elo/ment, and de/lo,ment of an o0erall lean
en0ironment
for the com/an,. This team was sta1ed with half a doIen em/lo,ees
who concentrated their collecti0e energies on lean manufacturing acti0ities.
As the lean team +ecame more /ro2cient with the lean tools and techniques,
it was time to +egin ma(ing /lans to address the ne"t areas of o//ortunit,
within the +usiness, namel, the lower 0olume and higher mi" /roduct
families.
7@@
In Ganuar, 3444, the lean steering committee held a formal re0iew to
assess the /rogress on the lean im/ro0ement initiati0es to date and to /lot
a course for the ne"t ,earPs acti0it,. The organiIation had made great strides
in the area of in0entor, reduction, in0entor, turns, and scra/ reduction with
their high:0olume cells during the /re0ious ,ear, and the, had increased
their out/ut ca/a+ilit, +, 3;W. The amount of customer orders running
+ehind schedule had +een reduced to 0irtuall, nothing. Howe0er, among all
these signi2cant achie0ements, it was recogniIed that there were still a few
outstanding issues that should +e addressed +, the lean team +efore tac(ling
the lower 0olume /roduct lines. After length, discussion +etween the lean
team and the steering committee, the following course of action was agreed
u/onB
7. Loc( down, +utton u/, and institutionaliIe the changes made to this
/oint. Se0eral (e, changes had +een made to the o/eration, +ut the,
had +een neither well documented nor com/letel, understood +, all
the /eo/le in0ol0ed with the change.
3. *e2ne what a com/leted cell loo(s li(e. There were 0ar,ing o/inions
as to when a cell im/lementation was com/lete, there+, lea0ing some
to feel it was time to mo0e on while others felt there was more to do.
This de2nition of a cell would lead to the esta+lishment of an Je"it
criteriaK for the cell, or quantitati0e and qualitati0e elements necessar,
for the cell to +e im/lemented.
5. .sta+lish an im/lementation a//roach that would de/lo, the identi2ed
/rinci/les of a cell in stages, the conce/t here +eing to incor/orate
the foundation /rinci/les of the cell in stage one and then come +ac(
at a later date to im/lement the /rinci/les necessar, to +ring a+out
a new le0el of o/erational /erformance in stage two.
6. Assign a factor, manager to manage the high:0olume /roducts of the
cell. Su/er0isors were assigned across de/artments, which made it
diUcult to de2ne ownershi/ for /roduct /erformance and there+,
generate continuous im/ro0ement.
;. *etermine a time line for de/lo,ing the a+o0e:mentioned actions
and de0elo/ a game /lan for designing and im/lementing the lower
0olume/higher mi" cells.
In -e+ruar, 3444, the lean team concentrated on documenting the new
/rocesses in the high:0olume cells, esta+lishing a common de2nition for a
successfull, im/lemented cell, and determining the e"it criteria required for
a cell to +e considered sta+le. The steering committee too( on the action
:AA
item to wor( with management on selecting the a//ro/riate /eo/le to +e
cell leaders for the new lean en0ironment. Hnce these identi2ed /rinci/les
were im/lemented and in /lace for a+out 6 to ; wee(s, the cells +egan to
e"hi+it new le0els of /erformance, which /a0ed the wa, for /lanning the
low: to medium:0olume cell. The team addressed this cell di1erentl, than
the high:0olume cells, which hadB
7. A limited quantit, of end:item /art num+ers to deal with
3. The same manufacturing /rocesses in0ol0ed with each /roduct
5. A 0er, consistent o/erational time from /art to /art at each station
6. A relati0el, consistent customer:demand /attern from month to
month
;. A limited quantit, of high:0olume com/onents to Nan+an
In contrast, the low: to medium:0olume /roducts hadB
7. ?< di1erent end:item /art num+ers
3. *i1erent manufacturing /rocesses and equi/ment, de/ending u/on
the end:item con2guration and /art siIe
5. H/erational times that were relati0el, consistent from /art to /art at
each station, +ut required setu/ times at each station ranging an,where
from 54 minutes to 6 hours for changeo0er +etween /roduct lines
6. A /roduct:demand +eha0ior that 0aried from 7344 /er da, to ; /er
da,, with an order frequenc, /attern from e0er, wee( to once /er
quarter
;. A wide range of com/onent /arts with 0ar,ing quantities de/ending
on the end:item mi", with some of the com/onent /arts +eing used
in multi/le end items
?. A signi2cantl, greater num+er of machines and assem+l, com/le"it,
The lean team followed a structured methodolog, for cell design which
ca/tured detailed data a+out the e"isting low: to medium:0olume /roduct
famil,. Using this methodolog, allowed them toB
7. alculate demand quantities /er da, in order to esta+lish runner,
re/eater, and stranger /roduct +eha0iors for low: to medium:0olume
/roducts.
3. .sta+lish material and wor( Low /atterns +, ma//ing the /rocess
and identif,ing 0olume /ercentages +etween stations.
:A7
5. #erif, if an, of the e"isting /roduct routings had +ac(trac(ing or a
re0erse Low of material.
6. a/ture wor( content times to understand 0ariations +etween /roducts
and +etween wor( stations that were designated for the cell.
;. 9enerate wor( loads on equi/ment to see what and how man,
machines were needed for the cell.
?. *etermine ta(t time for each of the /roducts and in total for the cell.
$, re0iewing the demand /attern, the, could calculate a designed
dail, /roduction rate to accommodate 0ariation for runner and
re/eater /roducts.
<. Understand how much of an im/act e"isting setu/ times would ha0e
on scheduling the mi" of /roducts.
@. *esign an a//ro/riate hard:signal Nan+an re/lenishment s,stem to
allow for the right raw materials/com/onents +eing a0aila+le in the
right quantities at the right location.
The 2nal design /roduced the following resultsB
7. .qui/ment was com/rised of 34 grinders and three assem+l, methods.
3. !oles and res/onsi+ilities o0er the entire o/eration Cfrom wor(:in/rocess
stores to grinding, +oring, 2nal assem+l,, /ac(aging, and
shi/mentD were de2ned and clari2ed.
5. !unner /roducts were dedicated to a /articular set of equi/ment and
+uilt to a dail, rate.
6. !e/eater /roducts were shared across common equi/ment and +uilt
on demand to a re/lenishment Nan+an from shi//ing. The /riorit,
for Nan+an orders was 2rst:in/2rst:out C-I-HD. a/acit, was allocated
+ased in the designed dail, /roduction rate.
;. &ew equi/ment was assigned to /ro0ide for 34W growth in this segment
to accommodate for ser0ice and lead:time reduction o+Fecti0es.
?. Stranger /roduct orders were +undled o0er a 3:wee( /eriod of time
and scheduled to run twice a month across all a0aila+le equi/ment
in the cell. $ecause these /roducts were not sold +ased on lead:time
or unit /rice, the, did not require the immediate turnaround of the
runner and re/eater /roducts.
:A:
ProCect "ime 'ine
"ec$ni%ues .tili!ed
Milestone Plan
MH@@ AH@@ ?FH@@ ??H@@ F?HFF FGHFF
High0olume
cell
NaiIen
e0ent is
initiated
om/letion
of
54:da,
to:do list
Lean team
is
launched
Third high0olume
cell is
o/erational
Low: to
medium0olume
/roFect is
launched
Low: to
medium0olume
cell
design is
com/lete
Lean manufacturing
C-i0e Primar,
.lementsD
sho/Loor metrics, ser0ice cell agreements, mi"model
manufacturing, P/S anal,sis, /roductfocused
routing anal,sis
Lean manufacturing
CNaiIen e0entD
Hne:/iece Low, ta(t time, /ercent loading chart,
Nan+ans, material /ull, ;S house(ee/ing, 0isual
controls, /ro+lem +oards, sho/Loor metrics,
/rocess ma//ing, SM.*, TPM, Po(a:,o(e
Lean manufacturing
C6:da,D
s,stems, standard wor(, wor( element anal,sis,
;S house(ee/ing, muda, /rocess ma//ing,
Nan+ans, HeiFun(a, Po(a:,o(e, TPM, H.., +ig si"
losses, Fo+ instruction training, cross:training
ell design P/S anal,sis, /rocess ma//ing, routing anal,sis,
ta(t calculation, wor(load +alancing, Nan+an
siIing, standard wor(, one:/iece Low
:A<
Bene)ts Ac$ie(ed
'essons 'earned
A
.sta+lish a full:time /roFect team to dedicate the resources necessar,
to focus on and /ro0ide su//ort for the integration requirements
necessar, with an initiati0e that is managing multi/le as/ects of lean.
A
larif, e"/ectations earl, in the /roFect so that all /arties (now what
the, are tr,ing to achie0e and what success loo(s li(e when the, get
there.
A
!ecogniIe that di1erent /roduct +eha0iors dri0e di1erent manufacturing
architectures, a fact that a1ects equi/ment la,outs, scheduling,
/lanning and control methodologies, the num+er of /arts to Nan+an,
Nan+an quantities, the focus for continuous im/ro0ement, etc.
Matching the /roduct:demand +eha0ior with the a//ro/riate manufacturing
architecture allows for the most e1ecti0e /erformance of
/roducts to the customer.
Metric Baseline
Act"al
=?EHFF> Target
,ig$3+olume P7
In0entor, dollars a6@6,444 a36@,444 a644,444
In0entor, turns ;.; 73.5 73
Hn:time deli0er, 64W @4W =4W
Scra/ /ercent 5.<W 7.;W 3.4W
,ig$3+olume P:
In0entor, dollars a64<,444 a344,444 a5;4,444
In0entor, turns =.; 34 73
Hn:time deli0er, 55W @@W =4W
Scra/ /ercent 5.<W 7.3W 3.4W
,ig$3+olume P<
In0entor, dollars a55;,444 a7444 a344,444
In0entor, turns 6.3 @.; 73
Hn:time deli0er, 55W ?;W =4W
Scra/ /ercent 4.@W 4.<W 7.4W
:A=
A
Select cell leaders who ha0e res/onsi+ilit,, accounta+ilit,, and authorit,
C!AAD for the im/lementation and ownershi/ for /erformance of
the cells after de/lo,ment.
A
.sta+lish an e1ecti0e TPM /rogram for a focused factor,/cell, critical
when manufacturing equi/ment is in0ol0ed.
A
Nee/ designs for one:/iece or small:+atch Low cells sim/le for 0isual
and conce/tual understanding.
A
In0ol0e su//liers and manufacturing equi/ment su//liers in the
design of Nan+an and TPM /rograms to increase commitment to the
/rocess changes.
A
Nee/ all shifts in a multi:shift en0ironment in0ol0ed, or gains will +e
su+o/timal.
"estimonials
JLean manufacturing is a /owerful tool, not onl, for achie0ing /erformance
gains unheard of in traditional s,stems, +ut also for gi0ing em/lo,ees
tools that im/ro0e morale, the team en0ironment, and a sense of
accom/lishment.K
BLean Steering Co!!ittee
J*o not underestimate the /ower of communicating lean accom/lishments
to ,our customer X it tells them ,ou are controlling ,our costs and dis/la,s
,our commitment to organiIational e"cellence.K
BGeneral Manager
JIt ta(es more than techniques to dri0e this (ind of changeM it ta(es
leadershi/.K
B%actory Manager
G'SSARY
:A6
Glossary
ABC !aterial han&ling.
The segregation of material +ased on re/lenishment
lead:time, 0alue, and /art com/le"it,. This is done to align /lanning and
control a//roaches with certain t,/es of /arts for +est utiliIation of
resources. &ot all /arts are created equal.
A"tono!ation.
H1ers the a+ilit, to se/arate man and machine, +ecause such
equi/ment has the ca/a+ilit, to automaticall, shut down when it detects
a defect or a+normalit,. The machine sta,s shut down until a human +eing
inter0enes, sol0es the /ro+lem, and starts the machine again.
Back N"shing.
The deduction from in0entor, records of /arts consumed in
an assem+l, when the item is either +oo(ed into 2nished goods or sold.
Block layo"t.
A high:le0el 0iew of the factor,, where square footage has +een
allocated, or J+loc(ed,K for s/eci2c areas. A general descri/tion of what
will ha//en in the area is understood in order to assist with the de0elo/ment
of material and information Low in the future design.
Cell =)ro&"ct cell>.
A clearl, focused entit, with the assigned resources necessar,
for it to control its own o/erational /erformance and satisf, customer
requirements for its gi0en /roducts.
ell la,out. A gra/hical re/resentation of the equi/ment//rocesses in a cell,
t,/icall, in a U:sha/e, with +oth the o/erator and material Low dis/la,ed.
Cell lea&er.
The indi0idual selected to lead the da,:to:da, acti0ities within a
cell. It can +e either a direct or indirect la+or em/lo,ee, de/ending on the
le0el of cell com/le"it,, t,/es of decisions to +e made, and ca/a+ilit, of
the wor(force.
:A?
Cell tea! work )lan.
A documented schedule CcalendarD of acti0ities for the
wee( within a cell. It la,s out the game /lan and /ro0ides a common
understanding for all cell mem+ers as to what e0ents should ta(e /lace
each wee(.
Cell workloa& analysis.
An assessment of the e1ect of wor(load on equi/ment
and /rocesses in the cell to assure ca/acit, to +uild future requirementsM
includes an anal,sis of the /roduct demand +eha0ior.
Co!!"nication )lan.
A structured /rocess +, which communication is to
ta(e /lace throughout the organiIation. It includes a de2nition and
descri/tion as to what message will go to whom when and +, what method.
Co!)le0 !i0 )ro&"ction sche&"ling.
The same as HeiFen(a. The esta+lishment
of a le0el demand /attern sequence +ased on the mi" of re/etiti0e orders
from the customer. -or e"am/le, if demand was for 744 A units, ;4 $
units, and ;4 units, then the HeiFen(a /attern would +e A, $, A, , A,
$, , $, X .
Conce)t &esign.
The 2rst stage of the future state design /hase. once/t design
esta+lishes the high:le0el 0iew of what the o/eration will loo( li(e when
the lean /rogram is im/lemented. It /ro0ides the foundation for detail
design.
Contin"o"s i!)rove!ent tools.
#er, sim/le tools that can +e utiliIed +, all
em/lo,ees to identif, and eliminate waste in their /rocess C20e wh,s,
histograms, cause:and:e1ect diagrams, frequenc, charts, Pareto diagrams,
etc.D.
C)5.
An inde" measure of the ca/a+ilit, of a /rocess to consistentl, /roduce
/arts. It com/ares the /rocess width Cstandard de0iationD with the s/eci2cation
width and location.
Cross6training.
.m/lo,ees in a /rocess +eing trained to /erform multi/le
ste/s within the /rocess, /refera+l, all the ste/s.
C"rrent state ga) )hase.
The second /hase in the lean manufacturing /rogram,
it is designed to ca/ture current o/erational /erformance, to lead
to an understanding of the maFor o/erational /rocesses as the, are toda,,
and to identif, root causes as to wh, /erformance is what it is.
C"sto!erHs"))lier align!ent.
*ocumenting and understanding all the customer
and su//lier relationshi/s that e"ist for /art Low in the factor,. It
in0ol0es identif,ing each /art and recording where it comes from and who
it goes to in order to esta+lish clear customer/su//lier alignment.
Glossary
:A@
Cycle ti!e =o)erational>.
The time required to com/lete one full c,cle of an
o/eration. An o/eration is a su+set of a /rocess.
Cycle ti!e =)rocess>.
The time required to com/lete one full c,cle of a /rocess,
made u/ of se0eral o/erations.
1esign &aily )ro&"ction rate.
The /roduction rate de0elo/ed in order to satisf,
customer demand. It ta(es into account the customer forecast and 0ariations
in that forecast. The cell is designed to /roduce at that rate for a
gi0en time frame.
1etail &esign.
The second stage of the future state design /hase. *etail design
anal,Ies what each indi0idual cell requires for im/lementation during the
NaiIen e0ents E items such as ta(t time, equi/ment, demand mi", /otential
la,out and staUng, routing anal,sis, etc.
1%MA =&esign *or !an"*act"ring an& asse!bly>.
A /roduct de0elo/ment
a//roach that in0ol0es multi/le functions concurrentl, throughout the
de0elo/ment /rocess to ensure all requirements are ca/tured. It also
focuses, through the use of good lean design /ractices, on designing a
/roduct that is /roduction friendl, with a 0iew toward reducing recurring
total costs.
0it criteria.
Suantitati0e and qualitati0e measures that are 0isi+le and can
clearl, show that success has +een achie0ed. ."am/les of quantitati0e goals
would include =@W on:time deli0er,, manufacturing lead:time of 3 da,s,
/roducti0it, of @=W. ."am/les of qualitati0e goals would include ha0ing
all A /arts on Nan+an, documentation of o/erating rules, ;S chec(lists,
communication +oards, training matri", /osted metrics, etc.
%inishe&6goo&s variation.
A calculated le0el of 2nished goods +ased on
demand 0ariation and ser0ice le0el required. This 2nished:goods in0entor,
is usuall, used for /roducts utiliIing Nan+an re/lenishment with Iero
customer tolerance on deli0er,.
%ive Pri!ary le!ents.
A design and im/lementation a//roach that re/resents
20e /rimar, facets of lean manufacturing. An a//roach that asserts
that all facets are required in order to su//ort and sustain a solid lean
manufacturing /rogram.
LS =ho"sekee)ing>.
A structured, 20e:ste/ a//roach to house(ee/ing that
engages +oth management and em/lo,ees in the /rocess. It is a matter of
sifting, sorting, swee/ing, standardiIing, and sustaining the wor( en0ironment.
:7A
%le06*ence &e!an& !anage!ent.
A /lanning and control technique where+,
customer demand is released to the cells through a set of o/erating rules
agreed u/on +, mar(eting and manufacturing.
%MA =*ail"re !o&es an& e9ect analysis>.
A technique where+, ris(s in the
/rocess are anal,Ied for /otential failure +ased on their e1ect and the
required function of an item.
%"t"re state &esign )hase.
The third /hase in the lean manufacturing /rogram,
it is s/lit into two stages. The 2rst is conce/t design, and the second is
detail design. In addition, this /hase includes the im/lementation /lan,
transition strateg,, and /lant communication for the /rogram rollout.
Gra)hic work instr"ctions.
A gra/hical re/resentation of wor( instructions
including wor( sequence, wor( content, 0eri2cation chec(s, and source
ins/ections.
(olistic !an"*act"ring.
A 0iew that there is interconnecti0it, and de/endenc,
among the -i0e Primar, .lements and that each element is critical and
required for the successful de/lo,ment of a lean manufacturing /rogram.
(oshin )lanning.
A strategic decision:ma(ing tool that focuses com/an,
resources on a few Cthree to 20eD critical initiati0es within the +usiness
and aligns these initiati0es from to/ to +ottom throughout the organiIation
0ia s/eci2c goals, /roFect /lans, and /rogress re/orting.
8!)le!entation )lan.
The schedule of e0ents for im/lementing the lean manufacturing
/rogram. It includes a sequence of NaiIen e0ents, deli0era+les,
!AA, duration, etc.
5ai3en event.
A time:+o"ed set of acti0ities carried out +, the cell team during
the wee( of a cell im/lementation. These acti0ities include training, /lanning,
design solutions, de/lo,ment, documentation, demonstrating /erformance,
etc. The NaiIen e0ent is the im/lementation arm of a lean
5anban.
A demand signal from the customer, the authoriIation to +egin
wor(. It controls the le0el of wor( in /rocess and lead:time for /roducts.
It facilitates immediate feed+ac( on a+normalities.
Lean assess!ent )hase.
The 2rst /hase in the lean manufacturing /rogram,
it co0ers the initial assessment of the le0el of leanness of the +usiness. It
gathers e"ternal information to esta+lish design criteria and determine
mar(et o//ortunities.
Glossary
:77
Lean !an"*act"ring a"&it.
The result of re0iewing a cell im/lementation to
/ro0ide feed+ac( through a standard scoring /rocess to indicate the le0el
of de/lo,ment achie0ed.
Lean roa& !a).
The clari2ed statement, understood +, all those in0ol0ed, of
the o0erall direction and ste/s or /hases required for a /articular lean
Level loa&ing.
*esigning a le0el load of demand for a gi0en cell in order to
accommodate the mi" of /roducts required for that cell C+ased on /roduct
0olume and wor( contentD.
Line sto).
Authorit, gi0en to an o/erator to shut down the line and not
/roduce an, more /roduct if a defect is found in the /rocess.
Loa&ing chart.
A chart used in conFunction with ta(t time to esta+lish wor(load
+alance for the wor( content elements of a gi0en cell and its /roduct
mi".
Logistics ele!ent.
The element that /ro0ides a de2nition for o/erating rules
and the mechanisms for /lanning/controlling the Low of material.
Lot si3e s)litting.
*i0iding a lot into su+:lots to accommodate simultaneous
/rocessing of an order.
Make6to6or&er )ro&"ction.
A /roduction architecture where /roducts are
made after the recei/t of a customer sales order.
Man"*act"ring Now ele!ent.
The element that addresses /h,sical changes and
design standards to +e de/lo,ed as /art of the cell.
Man"*act"ring lea&6ti!e.
The ela/sed time +etween when an order is released
for /roduction and the item is deli0ered into 2nished goods.
Man"*act"ring strategy.
A collecti0e (nowledge of the +usiness that contains
current com/etiti0e ad0antages and wea(nesses, identi2es mar(et o//ortunities,
and includes the associated manufacturing o+Fecti0es necessar,
to align with these o//ortunities.
Material )lanningHcontrol.
The o/erating rules and s,stems su//ort used for
/lanning and controlling the Low of material to, through, and from one
cell to the another.
Material )"ll =inter6cell>.
A /ull s,stem for re/lenishing material within a cell.
Material )"ll =intra6cell>.
A /ull s,stem for re/lenishing material +etween
cells.
:7:
Metrics ele!ent.
The element that addresses 0isi+le results:+ased /erformance
measures with targeted im/ro0ements and team rewards and recognition.
Milestone )lan.
A tool that identi2es maFor segments of a /roFect, the time
frame, sequence of maFor e0ents, and associated management de+riefs.
Mi06!o&el !an"*act"ring.
The a+ilit, to /roduce an, /roduct, an, quantit,,
an, time in order to res/ond to customer demand on a dail, +asisM designing
a manufacturing cell that can /roduce an, mi" or 0olume of /roducts
on an, gi0en da,.
M"&a.
Ga/anese word for waste, or non:0alue:added.
/on6re)etitive 5anban.
A Nan+an that is used for one:o1 or low:0olume
/roducts. It is introduced into the manufacturing /rocess when there is a
s/eci2c demand for a /roduct. The signal is sent to the su//lier for a
quantit, to 2ll the demand. After it has +een consumed, it is ta(en out of
the re/lenishment c,cle until it is needed again.
2 =overall e-"i)!ent e9ectiveness>.
A function of scheduled a0aila+ilit,
equi/ment /roducti0it,
/rocess ,ieldM used to understand the e1ecti0eness

of equi/ment.
296loa&ing.
Sending wor( to an outside su//lier for a s/eci2c o/eration or
set of o/erations due to a short:term ca/acit, de2cit.
2ne6level B2M.
All com/onent /arts are at the same le0el in the +ill of
material, with no su+:assem+lies, no Jgoes intoK relationshi/s, no leadtime
o1set, no structured $HM.
2ne6)iece Now.
Producing one /art at a time at an o/eration and /assing it
on to the ne"t o/eration after ha0ing recei0ed a demand signal.
2)erating r"les.
&ew documented rules for o/erating the cell as designed
CNan+an card s,stem, ca/acit, loading to =4W, incoming/outgoing material
handling, wor(a+le wor(, recording setu/ times, dail, equi/ment
chec(s, line sto/, etc.D.
2)erational roles an& res)onsibilities.
*ocumented e"/ectations for indi0idual
/ositions descri+ing what the, are accounta+le to accom/lish, s/eci2c
duties to +e /erformed, to whom the, re/ort, +oundar, of res/onsi+ilit,,
direct re/orts, etc.
2rgani3ation ele!ent.
The element that focuses on the identi2cation of /eo/lePs
roles and functions, training in the new wa,s of wor(ing, and communication.
Glossary
:7<
Pareto.
The conce/t that a small /ercentage of a grou/ has the most im/act.
Poka6yoke.
A mista(e:/roo2ng de0ice or /rocedure used to /re0ent defects
from entering a wor( /rocess.
Policy &e)loy!ent.
See Hoshin /lanning.
Process control ele!ent.
The element that is focused on the monitoring, controlling,
sta+iliIing, and /ursuit of wa,s to im/ro0e the /rocess.
Process !atri0.
The gra/hical re/resentation on a grid, with the manufacturing
/rocess across the to/ and /art num+ers down the side. Part Low is
drawn inside the grid and used to re0eal /atterns of commonalit,, resource
consum/tion, and re0erse /art Low.
Pro&"ct6&e!an& behavior analysis.
The segregation of /roducts into one of
three categories Crunner, re/eater, and strangerD +ased on their /roductdemand
+eha0iors.
Pro&"ct6*oc"se& !"lti&isci)line& tea!.
A team of /eo/le re/resenting 0arious
functions within the organiIation, all of whom are focused on im/ro0ing
the end:/roduct /erformance of a gi0en set of /roducts, no matter how
man, de/artmental lines those /roducts cross.
Pro&"ct gro")ing.
The segregating of end:/roduct demand items CSNUsD in
grou/ings, +ased on de2ned criteria.
Pro&"ctH-"antity assess!ent.
The P/S anal,sis tool loo(s for natural +rea(s
for /roduct grou/ings +, sorting the gathered data and determining a 2t
for /roduct cells +, their associated 0olumes and the /roduct alignment
characteristics.
ProKect charter.
A tool that de2nes and clari2es managementPs e"/ectations
in regard to the /ur/ose, o+Fecti0es, and e"/ected outcome of a /roFect.
This document must +e agreed to and signed o1 on +, all /arties +efore
a /roFect can +egin.
RAA =res)onsibility, acco"ntability, a"thority>.
Im/lies com/lete ownershi/
for a deli0era+le, or a /rocess, or a /erformance outcome. An indi0idual
Cone /ersonD is answera+le for all as/ects of this assignment. This /erson
ma, delegate tas(s +ut does not share the rose that has +een /inned to his
or her la/el.
Rate6base& sche&"le.
Used to esta+lish the /roduction quantit, for rate:+ased
/roducts in a gi0en cell. It is determined +, esta+lishing a dail, +uild
quantit, from +oth forecasted and +oo(ed orders, which then +ecomes
the wor( schedule for the cell.
:7=
Re)eater.
These /roducts ha0e signi2cant 0ariet, and will usuall, +e /roduced
across resources that are not dedicated to a s/eci2c Low line. *ue to the
lower 0olume amounts, 0aria+le order frequenc, and/or high 0aria+ilit,
in o/erational routings, these /roduct:demand /atterns will ha0e to +e
managed as mi":model /roduct and will require more /roduction control
su//ort than a runner t,/e of /roduct.
Ro"ting analysis.
The categoriIation of /roducts +ased on their /rocess Low,
wor( content, and 0olume to determine the most e1ecti0e wa, to manage
them in a cellular manufacturing en0ironment.
R"nner.
These /roducts are ordered in high 0olumes frequentl, from customers
and ha0e relati0el, sta+le demand /atterns. The are often managed
as rate:+ased /roducts and dedicated to s/eci2c cells.
Segregate& )ro&"ction sche&"ling.
The grou/ing of /roducts around constraints
Ce.g., changeo0erDM for e"am/le, all A /roducts are scheduled to
run on 2rst shift, while $ and /roducts are run in sequence during the
second shift due to a 3:hour changeo0er time +etween mi"es.
Service cell.
In contrast to a /roduct cell, a ser0ice o/eration is focused on
turnaround time and deli0er, relia+ilit, to the customer. Ser0ice cells do
not ha0e !AA for /roducts +ut are held accounta+le for their /erformance
to /roduct cells.
S8P2C =s"))lier6in)"t6)rocess6o"t)"t6c"sto!er>.
A /rocess:ma//ing methodolog,
used to ca/ture a /rocess, its out/uts, and the associated in/uts
that triggered the /rocess, in addition to identif,ing the customer of the
out/ut and the su//lier of the in/ut. It also collects information a+out
the /rocess, such as lead:time, 0olume, deli0er,, qualit, /erformance, etc.
SM1 =single6!in"te e0change o* &ies>.
A structured im/ro0ement methodolog,
for reducing changeo0er downtime on equi/ment to less than 74
minutes.
SPC =statistical )rocess control>.
The use of statistics and data gathering to
monitor /rocess out/ut and to control the qualit, of the /rocess.
Stan&ar& work.
*ocumentation of the agreed:u/on, one +est wa, to /roduce
a /roduct. It ser0es as the communication, training, and /rocess im/ro0ement
tool for the cell. It can include such information as c,cle time, ta(t
time, designed le0el of wor( in /rocess, o/erator Low sequence, material
Low sequence, staUng, etc.
Stranger.
These /roducts are the miscellaneous items that are +eing /roduced
within the /lant as one:o1 items or ha0e a 0er, low:0olume or infrequent
Glossary
:75
Conce /er ,earD demand /attern. These items are usuall, +est managed
through M!P and can +e segregated from the rest of the factor,.
Takt ti!e.
The rh,thm or +eat of demand for the cell. It re/resents the rate
of consum/tion +, the mar(et/lace and is +ased on the scheduled time
a0aila+le for the cell di0ided +, the designed dail, /roduction rate for the
cell.
TPM =total )ro&"ctive !aintenance>.
A structured a//roach to equi/ment
maintenance in0ol0ing o/erators, maintenance /ersonnel, and management,
all of whom ha0e s/eci2c roles and res/onsi+ilities to eliminate
un/lanned downtime on equi/ment.
Transition strategy.
Identi2cation of s/eci2c actions required to su//ort the
im/lementation of lean manufacturing through NaiIen e0ents with minimal
im/act on e"isting /roduction C+uild ahead, +leed o1 in0entor,, /re/
wor(, etc.D.
Trans)ortation )i)eline 5anban.
Used for A:t,/e /arts that are e"/ensi0e and
com/le", with long lead:times. The method in0ol0es 2lling the /i/eline
with constantl, Lowing Nan+ans, each with a certain num+er of da,sP
demand that results in a s/eci2c num+er of Nan+ans in the s,stem. The
Nan+ans are held and released from designated /oints in the su//l, chain
so as to minimiIe the re/lenishment time to the ne"t customer.
'is"al control.
The as/ects of lean manufacturing that su//ort line:of:sight
management Ce.g., cell name signs, /ainted Loors, mar(ed PHU areas,
/erformance metricsD.
'ol"!e !atri0.
A grid that has the manufacturing /rocess across the to/ and
/art num+ers down the side. Part:num+er 0olume, in units and hours, is
a//lied to the wor( content times Cfrom the wor( content matri"D to
segregate high: and low:0olume /roducts and determine the degree of
0ariation and im/act on the cell design.
$ork content !atri0.
A grid that has the manufacturing /rocess across the
to/ and /art num+ers down the side. Part:num+er wor( content for
manhours, machine time, and setu/ time are loaded to understand 0ariation
from /art to /art and /rocess to /rocess.
$orkable work.
A /rocess to 0erif, the a0aila+ilit, of wor( elements identi2ed
as +eing necessar, for a Fo+ to go into /roduction.
$orkloa& balancing.
Shifting the wor( content elements +etween o/erations
in order to +alance the wor(load for the cell to ta(t time.
RE;ERE1&ES
:7@
References
7. $elcher, Gohn 9., Gr.,
Pro&"ctivity Pl"s
1
(ow To&ay7s Best R"n Co!)anies Are
Gaining the Co!)etitive &ge
, Houston, T>B 9ulf Pu+lishing, 7=@<.
3. o(ins, 9ar,,
Activity6Base& Cost Manage!ent+ Making 8t $ork B A Manager7s
G"i&e to 8!)le!enting an& S"staining an 9ective ABC Syste!
, hicago, ILB Irwin,
7==?.
5. onner, *ar,l !.,
Managing at the S)ee& o* Change
1
(ow Resilient Managers
S"ccee& an& Pros)er $here 2thers %ail
, &ew 'or(B #illard $oo(s, 7==3.
6. o/acino, )illiam .,
S"))ly Chain Manage!ent
1
The Basics an& Beyon&
, $oca
!aton, -LB St. Lucie Press, 7==<.
;. ostanIa, Gohn !.,
The :"ant"! Lea)
1
8n S)ee& to Market
, .nglewood, &GB G:I:T
Institute of Technolog,, 7==;.
?. 9unn, Thomas 9.,
Man"*act"ring *or Co!)etitive A&vantage
1
Beco!ing
a $orl&
Class Man"*act"rer
, am+ridge, MAB $allinger Pu+lishing, 7=@<.
<. Ha,, .dward G.,
The ;"st6in6Ti!e Breakthro"gh
1
8!)le!enting the /ew Man"*act"ring
Basics
, &ew 'or(B )ile,, 7=@@.
@. Ha,es, !o+ert H., )heelwright, Ste0en ., and lar(, Nim $.,
1yna!ic
Man"*act"ring
1
, &ew 'or(B -ree Press, 7=@@.
=. Henderson, $ruce A., and Larco,
Gorge L.,
Lean Trans*or!ation
1
(ow To Change
4o"r B"siness into a Lean nter)rise
, !ichmond, #AB The Ha(lea Press, 7===.
74. Hill, Terr,,
, &ew 'or(B Prentice:Hall, 7==5.
77. Hunt, #. *aniel,
Process Ma))ing
1
(ow To Reengineer 4o"r B"siness
, &ew 'or(B
)ile,, 7==?.
73. Imai, Masaa(i,
Ge!ba 5ai3en
1
A Co!!onsense, Low6Cost A))roach to Manage!ent
, &ew 'or(B Mc9raw:Hill, 7==<.
75. Ingersoll .ngineers,
Making Man"*act"ring Cells $ork
, *ear+orn, MIB Societ, of
Manufacturing .ngineers, 7==3.
76. Mahone,, !. Michael,
(igh6Mi0 Low6'ol"!e Man"*act"ring
, .nglewood, &GB
Prentice:Hall, 7==<.
7;. Schon+erger, !ichard G.,
;a)anese Man"*act"ring Techni-"es
1
/ine (i&&en Lessons
in Si!)licity.
&ew 'or(B -ree Press, 7=@3.
::A
7?. Schon+erger, !ichard G.,
$orl& Class Man"*act"ring
1
The Lessons o* Si!)licity
A))lie&.
&ew 'or(B -ree Press, 7=@?.
7<. Schon+erger, !ichard G.,
$orl& Class Man"*act"ring+ The /e0t 1eca&e.
&ew 'or(B
-ree Press, 7==?.
7@. Shingo, Shigeo,
A Revol"tion in Man"*act"ring+ The SM1 Syste!.
PortlandB
Producti0it, Press, 7=@;.
7=. Shingo, Shigeo,
A St"&y o* the Toyota Pro&"ction Syste! *ro! an 8n&"strial ngineering
'iew)oint
,
PortlandB Producti0it, Press, 7=@=.
34. Shingo, Shigeo,
/on6Stock Pro&"ction
1
The Shingo Syste! *or Contin"o"s 8!)rove!ent
,
PortlandB Producti0it, Press, 7=@@.
37. Shingo, Shigeo,
<ero :"ality Control+ So"rce 8ns)ection an& the Poka64oke Syste!
,
PortlandB Producti0it, Press, 7=@?.
33. Shingo, Shigeo,
The Sayings o* Shigeo Shingo
1
5ey Strategies *or Plant 8!)rove!ent
,
PortlandB Producti0it, Press, 7=@<.
35. Shirose, Nunio,
TPM %or $orksho) Lea&ers
, PortlandB Producti0it, Press, 7==3.
36. To+in, *aniel !.,
Re6&"cating the Cor)oration
1
%o"n&ations *or the Learning
2rgani3ation
, .sse" GunctionB Hli0er )ight Pu+lications, 7==5.
3;. )omac(, Games P., and Gones, *aniel T.,
Lean Thinking
1
Banish $aste an& Create
$ealth in 4o"r Cor)oration
, &ew 'or(B Simon O Schuster, 7==?.
3?. )omac(, Games P., Gones, *aniel T., and !oos, *aniel,
The Machine That Change&
the $orl&
,
&ew 'or(B Har/er ollins, 7==4.
I14EQ
::<
Index
A
A,$, material handling, ;4[;7, <;
assem+l, /roduction unit /roFect,
7@;[7=6
autonomation, <7
B
+aseline /erformance, 76@
+atch:and:queue s,stem, <3, 7;?, 7@@
+enchmar(ing, @
+ill of materials C$HMD, 7<, ;7, ;3
+loc( la,outs, 734, 737, 735, 76@
$HM.
See
+ill of materials
&
ca/acit, control, 6=
ca/acit, /lanning, 7;?
cells, 3<
audit of, 74<, 756, 75<
ca/a+ilit, of, 7<
customer, ;3
de2ning, 7==
design criteria for, 6@, ?7, <5, 73<
design of, ?@, <7, 75?, 344, 343
designed dail, /roduction rate, <4
Le"i+ilit,, and, 7@, 57
Low of wor( through, 6?
high:0olume, 7=;[346
la,out of, ?7, <5[<6
leaders of, 3=, 7@3.
See also
leadershi/
de0elo/ment
selection /rocess for, 54
logistics, and, 6;
low:0olume, 7=;[346
manufacturing, 76
material /ull within, 76, ;6, 75;, 7?4
measurement o+Fecti0es, and, 63
num+er of, 76@
/ilot, 7<, 76=, 7@3
/roduct alignment, and, 734
/roduction, 7<
/roduct:mi" schedule for, 73<
/ull s,stem among, 7?
re0iewing /rogress of, =7
sequence of wor( introduction, 6=
ser0ice, ;7
staUng of, 3@
su//lier, 6?
wor( /lans, ;;
wor(load anal,sis, 75
wor(load of, 73?
changeo0er time, @5, 7<@, 7@<
changes
institutionaliIing, =7, 7?3, 7==
sustaining, =7[=3, 7;=, 7?3
commodit, /roduct, 7;?
::=
communication, 76<, 7;7, 7;=, 7@3
+oard, @@, 75@
lin(s, 777
/lanning, 36[3?, 6;, 73?
questions to answer, 3;[3?
conce/t design, 734, 76@
constraint scheduling, 6<
continuous im/ro0ement, 3=, 57, 5@,
5=, <=, =7, 7=;, 345
tools, 7?
controller, steering committe and, 7<3
cost of goods sold CH9SD, 5@
/N.
See
/rocess ca/a+ilit,
cross:training, 7?, 7@4
matri", 53[55, =7
culture, of com/an,, 35, 7@3
current state ga/, 77, 73, 774, 777[77@
customer /romise date de0iation, 76?
customer requested shi/ date, 76?
customer/su//lier alignment, ;3[;5
4
data
+aseline, 7<=
collection, 74;, 74@
demand, ?@
forecast, ?3
o/erational /erformance, 74;
/art num+er, <?
/erformance, 5;, 77;
/rocess Low, ?@
sales, ?3, 774
SNU demand, ?3
demand
+eha0ior assessment, 734
forecast, <4
/atterns of, 7=?, 7=<, 344
management, 7<, 734, 7?7
de/lo,ment, 757[75@
design criteria, 734
design for manufacturing/assem+l,
C*-MAD, 7<
desired state, 76@
detailed design, 76@
*-MA.
See
design for
manufacturing/assem+l,
direction, 7;=
dis/atch list, 6=
*uPont model, 5?[5@
E
elements anal,sis, 776
em/lo,ees, and engagement in lean
manufacturing, @
em/owerment, ?, 3<, 3@
errors 0s. defects, @6
e"ecution, of im/lementation /lan, 76@,
76=
e"it criteria, 734, 733, 75<, 75=, 7?=, 7==
e"/editing, 7<?, 7@?
;
failure mode and e1ects anal,sis
C-M.AD, 7<, =3
fear, 36
-I-H.
See
2rst:in/2rst:out
2rst:in/2rst:out C-I-HD, 6<, ;6, <3, 347
-i0e Primar, .lements, 5, 6[?, 74,
37[=3, 747, 74;, 7;4, 7<7, 7=3, 343
;S house(ee/ing, @4, @;[@<, =7, 75;,
75<, 75=, 7<=, 7@4, 7=@
Le":fence demand management, 7<
Le"i+ilit,, @4, 7<@, 7<=
-M.A.
See
failure mode and e1ects
anal,sis
64/?4 rule, ?5
future state design, 77, 73[75, 774, 777,
77=[754, 76@
G
ga/ anal,sis, 74;, 76@
goal alignment, 5?, 64[63, 743
goals, common, 7;=
Glossary
::5
,
high:0olume /roFect, 7?;[7<5
holistic, de2ned, 5
Hoshin /lanning, 64, 67
house(ee/ing.
See
;S house(ee/ing
I
im/lementation logic, 734
im/lementation /lan, 73<, 73=, 76@
incenti0e:+ased /a,, 7?@, 7?=, 7<3, 7<?,
7@?
in/ut/out/ut control, 6=
in0entor, turns, 5, ;6, <?, ==, 75=, 766,
76?, 7;?, 7?<, 7<3, 7=@, 7==, 345
M
Fust:in:time CGITD, 6@, ;5[;;, <?
B
NaiIen e0ents, 76, 7?, 7<, =7, 77@, 73?,
757, 755, 75?, 7;;[7?5, 7??, 7?<,
7<7, 7@?, 7@<, 7=4, 7=7, 7=3, 7=@
focused factor, /ilot, and, 7<;[7@5
sam/le agenda, 7;@
Nan+ans, 7<, 6?, 6<, 6@, 6=, ;4, ;7, ;@,
?=, <7, <5, 735, 73@, 75;, 75?, 75<,
75=, 76@, 7?4, 7??, 7?@, 7?=, 7<@,
7<=, 7@4, 7@?, 7=@, 344, 347, 345
demand signals, ;5[;;
identi2cation requirements for, <?
siIing of, ?7, <6[<<
'
leadershi/, 7;=
leadershi/ de0elo/ment, 36, 3=[54
lead:time, <?, 76?, 7<3, 7<?, 7<<, 7<@,
7<=, 7@3, 7@<, 347
minimiIing, <7
lean assessment, 74, 77, 74;[774, 776,
755
lean enter/rise, 7;<
lean manufacturing
a//roach, <[7=
audit, 7?
communication, 74, 76, 36[3?. See
also
communication /lanning
engaging em/lo,ees in, @
focus of, ?
holistic 0iew of, 5[?, ?7, =;
im/lementation methodolog,, 7;
issue/element matri", 77<
/rinci/les, 7;
requirements /lanning, and, 6@
road ma/, =, 74, 7?7
self:assessment, 74?, 74<
team, @[7=, 7@3.
See also
team
techniques, 7?7
total /roducti0e maintenance
CTPMD, and, @5.
See also
total
/roducti0e maintenance
unions, and, 57, 7?@, 7?=, 7<3, 7@?
0s. mass /roduction, <
le0el loading, ;;[;?, <4, 75<
line:of:site management, @<, 7@4
loading charts, <3
localiIed o/timiIation, 5@
logistics, 6, ;, 75, 6;[;=, 747.
See also
-i0e Primar, .lements
de2nition of, 6;[6?
losses, si" +ig, @5, @6
M
maintenance.
See
total /roducti0e
maintenance CTPMD
manufacturing deli0er,, 76?
manufacturing Low, 6, ;, ?7[<<, 747,
7?4, 7<=.
See also
-i0e Primar,
.lements
manufacturing resource /lanning
CM!P IID, 6@, ;4, ;7, ?5, ?@, 7;?,
7?=
manufacturing strateg, outline, 77
mar(et segmentation, 74=
::>
master /roduction schedule, 7;?
material +ac(Lushing, 7<
material handling CA,$,D, ;4[;7
matri"
cross:training, 53[55, =7
decision, 734
issue/element, 77<, 755
o/tion selection, 737
/rocess, ??
0olume, ?@, ?=, 73=
wor( content, ??, ?<, 73=
measures, =7
de2nition of, 5?, 63[65
o+Fecti0es of, 63
out/ut:+ased, 5?, 5@[5=
/erformance, @<[@@, 7?7, 7?3
/rocess:dri0en, 5?, 5=
metrics, 6, ;, 5;[65, 747, 7<3.
See also
mista(e /roo2ng.
See
Po(a:,o(e
mi":model manufacturing, 7<, ;<[;@
one:/iece Low, ?7, <7[<5, 75;, 75<, 75@,

7?@, 7<@, 346
cell, 0s. +atch and queue, 7@@
on:time deli0er,, 7<?, 7<@, 7@3, 7=5,
7=@, 345
o/erational roles and res/onsi+ilities,
36, 54[53
o/erations redesign /rogram, 765[7;6
order /rocessing, 7<
organiIation, 6, ;, 35[55, 6<, 747.
See
also
organiIation chart, 734
organiIation conce/t, 734, 737, 736,
73;, 73<
original equi/ment manufacturers
CH.MsD, ?3, =?, 76;, 7;?, 7=?
o0erall equi/ment e1ecti0eness CH..D,
@6
ownershi/.
See also
/rocess owners
realignment of, 3<
results, 5?
P
Pareto diagram, 77<, 755
ParetoPs @4/34 rule, ;4
/arts, sorting of, ;3.
See also
A,$,
material handling
/erformance le0els, =7, 744
/lanning
ca/acit,, 6=
in:+ound, 6?
internal, 6?
out:+ound, 6?
/riorit,, 6@
/riorit, control, 6=
/lanning and control function, 6<[6=
/lant load /ro2les, 734
/oint of use CPHUD, ;6
Po(a:,o(e, 7?, @4, @6[@;, 7<@
PHU.
See
/oint of use
/ro+lems, documentation of, @@
/rocess ca/a+ilit, C/ND, 7<
/rocess control, 6, ;, <=[=4, 747. S
ee also
/rocess c,cle time, 5=
/rocess Low, 75;
/rocess ma/, ?7, ?6[??, ?@, 73<, 7<@
/rocess matri", ??
/rocess owners, 75, 76, 773, 73?, 76=,
7;3[7;5, 7?3, 7?=, 7<3, 7@3, 7@=,
7=4, 7=5
/rocess qualit,, 5=
/rocess 0alue anal,sis CP#AD, 73
/roduct alignment, 734
characteristics, ?3
/roduct deli0er,, as out/ut measure, 5=
/roduct demand anal,sis, 73@
/roduct demand +eha0ior, 734, 737, 756
/roduct de0elo/ment, 7<
/roduct life c,cles, 7;?
/roduct qualit,, as an out/ut measure,
5=
/roduct/quantit, CP/SD anal,sis, ?7,
?3[?6
Glossary
::6
/roduct:focused res/onsi+ilit,, 36,
3?[3@
/roduction loss, 755
/roduct:mi" schedule, 73<
/roFect charter, =, 74, 747, 736, 7@@
sam/le, 743
/roFect management
assum/tions, 7@
com/onents of, 74
/roFect milestone /lan, =, 74, 747, 743,
736, 7@@, 7=7, 343
sam/le, 745
/roFect time lines, 7;4, 7?4, 7<4, 7@7,
7=7, 343
P#A.
See
/rocess 0alue anal,sis
N
quic(:hit list, 77@
R
!AA.
See
res/onsi+ilit,, accounta+ilit,,
and authorit,
rate:+ased schedule, ;?, ;@, ?=
release and control, 6<
re/eater /roducts, ?5, ?6, 7;7, 344, 347
res/onsi+ilit,, accounta+ilit,, and
authorit, C!AAD, 74, 3<, 73?, 7;3,
7@<, 346
return on in0estment C!HID, 5@
roll:through ,ield, 5=, 744, 77;
root cause anal,sis, 776
routing anal,sis, ?7, ??[?=
rules, ownershi/ of, 6<
runner /roducts, ?5, ?6, 7;7, 344, 347
S
scheduled time a0aila+le, <4
Sei(etsu, @<
Seiri, @?
Seiso, @<
Seiton, @?
self:assessment, <, @
ser0ice cells, ;7
setu/s, @4, =7, 75;, 347
internal 0s. e"ternal, @7
reductions in, 7@3, 7@?
standardiIing, @3
Shitsu(e, @<
single:minute e"change of dies
CSM.*D, 7?, @4[@3, 75=, 7??, 7<@,
7<=, 7@4, 7@<, 7=@
SIPH, 73, ;5, 777, 775, 73<
SM.*.
See
single:minute e"change of
dies
s/aghetti diagram, ?;, ??
SP.
See
statistical /rocess control
staUng /roFections, 734
statistical /rocess control CSPD, 7?
stoc((ee/ing units CSNUsD, ?3, <3, 74@
stranger /roducts, ?5, ?6, 7;7, 344, 347
suggestion +o", 746, 73;
su//lier interface, 775
su//lier /erformance, 76?
su//l,:chain management, 76;
su//ort, 7?4
"
ta(t time, 76, ?7, ?=[<7, 73?, 73<, 756,
75;, 347
de2ned, ?=
designed, 73@
0s. c,cle time, ?=, <5, <6
0s. machine time, <7
0s. man time, <7
team
candidates, @[=
full:time 0s. /art:time, @, 7;3, 7=5, 345
mo+iliIation of, =
roles, @, =, 74, 76, 75;, 7;3, 7@=, 7=5
time o+ser0ation form CTH-D, ?<
total /roducti0e maintenance, 7?
total /roducti0e maintenance CTPMD,
@4, @3[@6, 75=, 7<@, 7@<, 7=@, 346
t,/es of, @5
TPM.
See
transition strateg,, 73<
::?
.
unions, 57.
See also
lean manufacturingB
unions, and
+
0isual controls, @4, @<[@@, 75;
0olume matri", ?@, ?=
*
waste, 776, 77;, 755, 75;, 7=?
wor( content matri", ??, ?<
wor( in /rocess in0entor,, ;6, 7@<
wor( instructions, @4, @@[=4, 75;, 75<
wor(a+le wor(, ;@[;=
wor(Low management, 6<
wor(force /re/aration, 36, 53[55
wor(load +alancing, ?7, <7[<5
wor(sho/ training, 7;4, 7<7, 7@7, 7=3__
Lean
Manufacturing
Tools,
Techniques,
and
How To
Use Them
Applying Manufacturing Execution Systems
by Michael McClellan
Back to Basics:
Your Guide to Manufacturing Excellence
By Steven A. Melnyk
R.T. Chris Christensen
Enterprise Resources Planning and Beyond:
Integrating Your Entire rgani!ation
by Gary A. Langenwalter
ERP: "ools# "ec$ni%ues# and Applications
for Integrating t$e Supply &$ain
by Carol A. Ptak with li Schragenhei!
Integral 'ogistics Management:
Planning and &ontrol of &ompre$ensi(e Business Processes
by Pa"l Sch#nsleben
In(entory &lassi)cation Inno(ation:
Pa(ing t$e *ay for Electronic &ommerce and
+endor Managed In(entory
by R"ssell G. Broeckel!ann
'ean Manufacturing:
"ools# "ec$ni%ues# and ,o- "o .se "$em
by $illia! M. %el&
Macrologistics Management:
A &atalyst for rgani!ational &$ange
by Martin Stein an& %rank 'oehl
Restructuring t$e Manufacturing Process:
Applying t$e Matrix Met$od
by Gi&eon (alevi
Supply &$ain Management:
"$e Basics and Beyond
by $illia! C. Co)acino
The St. Lucie Press/APIS Series on !esource Management
"itles in t$e Series
"$e St/ 'ucie Press0API&S Series on Resource Management
Ale"andria, #irginia
St/ 'ucie Press
$oca !aton % London
&ew 'or( % )ashington, *..
+,
)ILLIAM M. -.L*
Lean
Manufacturing
Tools,
Techniques,
and
How To
Use Them
This +oo( contains information o+tained from authentic and highl, regarded sources. !e/rinted material
is quoted with /ermission, and sources are indicated. A wide 0ariet, of references are listed. !easona+le
e1orts ha0e +een made to /u+lish relia+le data and information, +ut the author and the /u+lisher cannot
assume res/onsi+ilit, for the 0alidit, of all materials or for the consequences of their use.
&either this +oo( nor an, /art ma, +e re/roduced or transmitted in an, form or +, an, means, electronic
or mechanical, including /hotoco/,ing, micro2lming, and recording, or +, an, information storage or
retrie0al s,stem, without /rior /ermission in writing from the /u+lisher.
The consent of St. Lucie Press does not e"tend to co/,ing for general distri+ution, for /romotion, for
creating new wor(s, or for resale. S/eci2c /ermission must +e o+tained in writing from St. Lucie Press
for such co/,ing.
*irect all inquiries to St. Lucie Press, 3444 &.). or/orate $l0d., $oca !aton, -lorida 55657.
"rademark 1otice:
Product or cor/orate names ma, +e trademar(s or registered trademar(s, and are
used onl, for identi2cation and e"/lanation, without intent to infringe.
8 3447 +, )illiam M. -eld
&o claim to original U.S. 9o0ernment wor(s
International Standard $oo( &um+er 7:;<666:3=<:>
Li+rar, of ongress ard &um+er 44:4;=7?5
Printed in the United States of America 7 3 5 6 ; ? < @ = 4
Printed on acid:free /a/er
'i2rary of &ongress &ataloging3in3Pu2lication 4ata
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
-eld, )illiam M.
Lean manufacturing B tools, techniques, and how to use them / +, )illiam M. -eld.
/. cm.
Includes +i+liogra/hical references C/. D and inde".
IS$& 7:;<666:3=<:> Cal(. /a/erD
7. Production management. 3. osts, industrial. 5. Production management E
ase studies. I. Title.
TS7;; .-6=@; 3444
?;@.;Edc37
44:4;=7?5
5
4edication
This +oo( is dedicated to m, four sons E
$enFamin, &athan, Gaco+, and Samuel.
Than( ,ou for ne0er letting me forget that I am ,our dad.
6
&ontents
Part I/ 4escription of 'ean Manufacturing
&$apter 7/ 'ean Manufacturing: A 8,olistic9 +ie-
..................................... 5
&$apter :/ 'ean Manufacturing Approac$
................................................... <
Part II/ ;i(e Primary Elements
&$apter </ rgani!ation Element
................................................................ 35
&$apter =/ Metrics Element
.......................................................................... 5;
&$apter 5/ 'ogistics Element
........................................................................ 6;
&$apter >/ Manufacturing ;lo- Element
.................................................... ?7
&$apter 6/ Process &ontrol Element
............................................................ <=
&$apter ?/ Sustaining t$e &$ange
................................................................ =7
Part III/ Putting It All "oget$er
&$apter @/ Setting t$e Stage
.......................................................................... =;
&$apter 7A/ ,o- It Begins
............................................................................ ==
&$apter 77/ "$e Game Plan
........................................................................ 747
&$apter 7:/ 'ean Assessment
..................................................................... 74;
&$apter 7</ &urrent State Gap
................................................................... 777
&$apter 7=/ ;uture State 4esign
................................................................ 77=
&$apter 75/ 4eployment
............................................................................. 757
&$apter 7>/ "$e Results
.............................................................................. 75=
?
Part I+/ &ase Studies
&ase Study A: perations Redesign Program
.......................................... 765
&ase Study B: Bai!en E(ent3Based 'ean Program
................................... 7;;
&ase Study &: ,ig$3+olume3;ocused ;actory ProCect
............................ 7?;
&ase Study 4: Bai!en E(ent3Based ;ocused ;actory Pilot
..................... 7<;
&ase Study E: Assem2ly Production .nit ProCect
.................................... 7@;
&ase Study ;: ,ig$3+olume and 'o-3+olume &ell ProCect
.................... 7=;
Glossary
........................................................................................................ 34<
References
..................................................................................................... 37=
Index
.............................................................................................................. 335
@
Preface
This +oo( was written in order to gi0e the general manufacturing /ractitioner
a reference guide +, which to lead the successful design and de/lo,ment of a
lean manufacturing /rogram. It is for those indi0iduals who ha0e either tried
a lean manufacturing im/lementation and recei0ed undesira+le results or ha0e
+een wor(ing at it a while and do not reall, (now what to do ne"t. H0er the
,ears, I ha0e +ecome more and more /ragmatic in m, a//roach to lean
manufacturing.
I am not a /urist when it comes to methodolog,. In fact, in this
+oo( I am sharing with ,ou information +ased on m, own /ersonal research,
true:life e"/eriences, and lessons learned through the im/lementation of lean
/rinci/les within a num+er of com/anies. It is this +road:+ased e"/erience that
has allowed me to de0elo/ such a /ragmatic a//roach. M, e"/erience has
taught
me that, although a s/eci2c /hiloso/h, ma, wor( well with one /articular
/roFect or com/an,, it ma, not wor( as well uni0ersall, across other o/erations.
The information, time frames, and methodologies contained within this
+oo( are geared /rimaril, for o/erations that ha0e 544 to ;44 em/lo,ees.
The content was written for an audience o/erating at the le0el of /lant
manager, /roFect manager, or manufacturing manager within a +usiness,
although most certainl, schedulers, /lanners, industrial engineers, and 2rstline
su/er0isors can also +ene2t from this material. The +oo( /ro0ides tools
and techniques that can +e used for +oth high:0olume/low:mi" and low0olume/
high:mi" /roduct en0ironments. Although man, of the techniques
are designed for discrete unit manufacturing o/erations, those in the /rocess
industries could utiliIe man, of the /rinci/les /resented here, as well.
I realiIe that there are some of ,ou who o/erate within an en0ironment
that does not require ,ou to Fustif, ,our /osition on lean manufacturing
e0er, ste/ of the wa, and that such an en0ironment will acce/t the need for
7A
lean management +ased on faith. This +oo( was not written for ,ou. This
+oo( was written for ,our colleagues E those who need to Fustif, their
/osition e0er, ste/ of the wa, and must constantl, +attle Jhurdle managementK
to de/lo, their lean /rograms. 'ou (now who ,ou are and ,ou (now
what I am tal(ing a+out. This +oo( was written with ,ou in mind.
&ow, one does not learn how to +e lean Fust from reading a +oo(. It is
through actual hands:on im/lementation that one learns what does and does
not wor( in most situations. It is out on the sho/ Loor where /ractical meets
theor,. It is in the actual wor( en0ironment where one learns that to +e
successful it is more im/ortant to ha0e a clear understanding of how these
techniques wor( than a 0ague understanding of what the technique is.
This +oo( has +een di0ided into four /arts. Part I /ro0ides an e"/lanation
of
why
a holistic a//roach to lean is so +ene2cial in securing sustained
im/ro0ementM it /ro0ides an o0erall 0iew of
what
to do. The /ur/ose of Part
II is to furnish the reader with an understanding of the conce/t of the -i0e
Primar, .lementsM it e"/lores in detail se0eral as/ects of each of the 20e
elements. Part III was written in the form of a stor, to de/ict actual use of
the techniques from the ince/tion of a /roFect to im/lementation in the
factor,M it hel/s the reader see
how
and
when
these /rinci/les are a//lied as
/art of a lean manufacturing /rogram. Part I# /resents case studies of si"
di1erent com/anies that ha0e ta(en on the challenge of changing their
+usinesses
and descri+es how the com/anies ha0e de/lo,ed lean manufacturing
within their facilities. .ach case stud, was designed to re0eal a di1erent as/ect
of im/lementing lean manufacturing within an o/eration.
The entire +oo( attem/ts to /ro0ide insight as to the choice and use of
a//ro/riate tools for assessment, anal,sis, design, and de/lo,ment of a
successful
lean manufacturing /rogram. Although it does not co0er e0er, lean
manufacturing as/ect, issue, or situation, it does o1er a road ma/ that can
guide a com/an, toward the de0elo/ment of a lean manufacturing en0ironment.
H0er the ,ears, I ha0e read a+out, witnessed, and heard of a great man,
im/lementations that ha0e neither achie0ed their intended goals nor sustained
results. M, e"/erience has led me to conclude that there are se0eral
reasons for the demise of these lean manufacturing /rogramsB C7D no clari2ed
e"/ectation or 0ision as to what the new lean en0ironment was to loo( li(eM
C3D lac( of a clear direction as to where to go and what to do ne"tM C5D limited
(nowledge +ase for how to conduct the im/lementationM C6D signi2cant focus
on the mechanics of the new /rocess +ut little attention /aid to organiIation
redesign issues connected with the change. These are (e,, critical issues that
must +e addressed for an im/lementation to +e successful. The fact that man,
com/anies ha0e neglected to do so has led me to write this +oo(.
77
Ackno-ledgments
I would sincerel, li(e to e"/ress m, a//reciation to all the /eo/le and multi/le
com/anies with whom I ha0e had the o//ortunit, to wor( o0er the
,ears. I am e"tremel, grateful to a great man, of ,ou for the tremendous
(nowledge I ha0e recei0ed during the last 7; ,ears. It is the 0ast di0ersit, of
,our ideas and +usiness situations that has allowed me to ha0e the insight
necessar, to write this +oo(. .0en though hundreds of indi0iduals ha0e
inLuenced the writing of this +oo(, I would s/eci2call, li(e to than(B Phil
Parr,, of the $ourton 9rou/, for his man, hours of counsel and guidance
during a time of tremendous u/hea0al in m, lifeM !on Aarns, of $oeing, for
allowing me the o//ortunit, to show what is /ossi+le no matter what the
im/ending oddsM Gohn Paul, for gi0ing me the chance to see an entirel, new
glo+al world in a 0er, short /eriod of timeM *a0id Hall, Goe ostello, and
Mi(e $ell, for their 0alua+le insight, thoughts, and feed+ac( +oth +efore and
during the writing of this manuscri/tM Allie McArth,, for her technical su//ort,
ad0ice, and editingM and most of all I want to than( m, wife, Gulie Ann,
for sta,ing the course with me o0er the /ast 7; ,ears of learning, listening,
and leading E without her consistent su//ort, this +oo( could not ha0e +een
written.
7<
"$e Aut$or
*illiam M/ ;eld
is a client /artner with am+ridge Management onsulting
CMD, a di0ision of am+ridge Technolog, Partners. He has nearl, 7; ,ears
of industr, e"/erience im/lementing lean manufacturing im/ro0ements and
has conducted o0er ?4 indi0idual NaiIen e0ents, im/lemented o0er 344
manufacturing
cells, and managed se0eral lean manufacturing /rograms CutiliIing
man, of the conce/ts descri+ed in the +oo(D for com/anies in a 0ariet,
of industries. He has wor(ed in the machining, sheet metal, industrial /roducts,
/neumatic tools, aeros/ace, electronics, /ower dri0es, and automoti0e
industries.
Prior to his wor( with M, $ill was a manager of change management
for In0ens,s, PL, where he was res/onsi+le for the de0elo/ment and
im/lementation
of +usiness change management /rograms for In0ens,s com/anies
throughout &orth America. He has +een a /lant manager for Stanle,
Mechanic Tools and a manufacturing and materials management consultant
for .rnst O 'oung, in addition to s/ending o0er 74 ,ears in the aeros/ace
and defense industr, at $oeing Cformerl, Mc*onnell *ouglasD. $ill has also
ser0ed as /roFect manager for the im/lementation of se0eral cellular
manufacturing
/rograms and has /artici/ated in the im/lementation of two M!P
II s,stems. He has held multi/le line:management /ositions in manufacturing
and materials management. $ill recei0ed his Master of $usiness Administration
degree in o/erations management, earned a $achelorPs degree in
+usiness administration, and is certi2ed in /roduction and in0entor,
management
CPIMD with APIS. He can +e contacted at C576D 663:=<?@ or
william.feldQworldnet.att.net.
75
A2out API&S
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4ES&RIP"I1
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MA1.;A&".RI1G
<
7
'ean Manufacturing:
A 8,olistic9 +ie-
*$at Is Meant 2y
Holistic
E
hat is meant +, the word
holistic
R Is it meant to im/l, a wellrounded
/ers/ecti0eR Is it used to descri+e an o0erall state of
wellnessR *oes it mean all:encom/assingR If we chec( the de2nition
according to )e+sterPs .nglish *ictionar,, holistic means Jem/hasiIing
the organic or functional relation +etween /arts and wholes.K &ow, none
of these de2nitions of holistic is necessaril, wrongM howe0er, when associated
with our descri/tion of lean manufacturing, the conce/t of holistic is meant
to im/l, the interconnecti0it, and de/endence among a set of 20e (e,
elements. .ach indi0idual element is critical and necessar, for the successful
de/lo,ment of a lean manufacturing /rogram, +ut no one element can stand
alone and +e e"/ected to achie0e the /erformance le0el of all 20e elements
com+ined.
.ach of these elements contains a set of lean /rinci/les which, when
wor(ing together, all contri+ute to the de0elo/ment of a world:class
manufacturing
en0ironment, often reLected +, a com/an, in0entor,:turn le0el of
;4 or higher. As descri+ed +, Schon+erger in his +oo(,
$orl& Class Man"*act"ring+
The /e0t 1eca&e
, in0entor, turns /ro0ide com/ara+le anecdotal e0idence
of the le0el of /erformance of a com/an, regardless of changes in
economic swings, monetar, /olicies, trade /ractices, or internal com/an,
mani/ulationsB J)e need not rel, on case studies or news cli//ings. Hne
statistic e"tracta+le from cor/orate annual re/orts tells the stor, with sur/rising
accurac,B in0entor, turno0er Ccost of sales di0ided +, on:hand in0entor,D.
*
=
It ha//ens that when a com/an, manages its /rocesses /oorl,, waste in the
form of in0entor, /iles u/.K
7<
&ot onl, are these lean /rinci/les interacti0e and co:de/endent, +ut there
is also a fundamental relationshi/ that e"ists among these /rinci/les as to
the sequence +, which the, should +e de/lo,ed. So what e"actl, are these
20e elements and what ma(es them so co:de/endentR
4escription of t$e ;i(e Primary Elements
The -i0e Primar, .lements for lean manufacturing are C7D Manufacturing
-low, C3D HrganiIation, C5D Process ontrol, C6D Metrics, and C;D Logistics
C-igure 7.7D. These elements re/resent the 0arious facets required to su//ort
a solid lean manufacturing /rogram, and it is the full de/lo,ment of these
elements that will /ro/el a com/an, on a /ath toward +ecoming a worldclass
manufacturer.
-ollowing is a +asic de2nition of each of the -i0e Primar, .lementsB
A
Man"*act"ring %low+
The as/ect that addresses /h,sical changes and
design standards that are de/lo,ed as /art of the cell.
A
2rgani3ation+
The as/ect focusing on identi2cation of /eo/lePs
roles/functions, training in new wa,s of wor(ing, and communication.
A
Process Control+
The as/ect directed at monitoring, controlling, sta+iliIing,
and /ursuing wa,s to im/ro0e the /rocess.
A
Metrics+
The as/ect addressing 0isi+le, results:+ased /erformance
measuresM targeted im/ro0ementM and team rewards/recognition.
A
Logistics+
The as/ect that /ro0ides de2nition for o/erating rules and
mechanisms for /lanning and controlling the Low of material.
These /rimar, elements /ro0ide full co0erage of the range of issues that
surface during a lean manufacturing im/lementation. .ach element focuses
on a /articular area of em/hasis and com/artmentaliIes the acti0ities. .0en
though each element is im/ortant on its own for the de/lo,ment of a successful
lean manufacturing /rogram, the /ower comes from integration of
the elements. -or instance, Manufacturing -low sets the foundation for
change. Peo/le see acti0it, on the sho/ Loor, furniture +eing mo0ed Csometimes
for the 2rst timeD, machines or Loors or walls +eing /ainted, and areas
+eing cleaned u/. ."citement and energ, surround this 0isi+le change. Add
to this the less than 0isi+le changes in infrastructure relati0e to organiIational
roles and res/onsi+ilit,, new wa,s of wor(ing, training of /ersonnel, multi:
Lean Man"*act"ring+ A (olistic 'iew
5
function teaming, and identi2cation of customer/su//lier relationshi/s.
-inall,, add the 0isi+le /resence of sho/Loor measurements reLecting status,
equi/ment +eing re/aired, gra/hic wor( instructions +eing /osted at wor(
stations, and machine changeo0er times +eing recorded and im/ro0ed. These
/rimar, elements com/lement one another and are all required to su//ort
each other as /art of a successful im/lementation.
Most lean manufacturing initiati0es focus on the /rimar, elements of
Manufacturing -low, some on Process ontrol and areas of Logistics. Hnce
in a while, there is the mention of Metrics and some discussion regarding
HrganiIation, usuall, training. This lac( of attention to the whole is a shame,
+ecause it is the culture changes in HrganiIation and the infrastructure
im/ro0ements in Logistics that institutionaliIe the im/ro0ements and /ro0ide
for sustained change within the organiIation. )hen initiati0es focus on
Fust the mechanics and techniques Cindicati0e of +oth Manufacturing -low
and Process ontrolD, the im/ro0ement is more a+out calculations and formulas
than it is a+out im/ro0ing wor(force ca/a+ilit,. An,one can read a
+oo(, run a num+ers anal,sis on demand +eha0ior, calculate ta(t time, and
esta+lish a U:sha/ed la,out, +ut doing so is not what will ma(e a com/an,
di1er from its com/etition. True com/etiti0e ad0antage comes from instilling
;igure 7/7 ;i(e Primary Elements of 'ean Manufacturing
Manufacturing ;lo-
7. Product/quantit, assessment C/roduct grou/D
3. Process ma//ing
5. !outing anal,sis C/rocess, wor(, content, 0olumeD
6. Ta(t calculations
;. )or(load +alancing
?. Nan+an siIing
<. ell la,out
@. Standard wor(
=. Hne:/iece Low
Process &ontrol
7. Total /roducti0e maintenance
3. Po(a:,o(e
5. SM.*
6. 9ra/hical wor( instructions
;. #isual control
?. ontinuous im/ro0ement
<. Line sto/
@. SP
=. ;S house(ee/ing
rgani!ation
7. Product:focused, multidisci/lined
team
3. Lean manager de0elo/ment
5. Touch la+or cross:training s(ill matri"
6. Training Clean awareness, cell control,
metrics, SP, continuous im/ro0ementD
;. ommunication /lan
?. !oles and res/onsi+ilit,
'ogistics
7. -orward /lan
3. Mi":model manufacturing
5. Le0el loading
6. )or(a+le wor(
;. Nan+an /ull signal
?. A,$, /arts handling
<. Ser0ice cell agreements
@. ustomer/su//lier alignment
=. H/erational rules
Metrics
7. Hn:time deli0er,
3. Process lead:time
5. Total cost
6. Sualit, ,ield
;. In0entor, CturnsD
?. S/ace utiliIation
<. Tra0el distance
@. Producti0it,
>
ca/a+ilit, within the wor(force, and this can onl, +e accom/lished throughB
C7D achie0ing demonstrated (nowledge transfer +, +uilding an em/owered
wor(force, C3D engaging all em/lo,ees within the +usiness +, steering their
collecti0e energies in the same direction, and C5D em/owering the wor(force
with clari2ed e"/ectations, common /ur/ose, and accounta+ilit, to get the
Fo+ done. An organiIation with this ca/a+ilit, can +e neither co/ied nor
+ought +, the com/etitionM it must +e designed, de0elo/ed, directed, and
su//orted.
This +oo( focuses on the relationshi/s among each of the /rimar, elements
and /ro0ides a Jhow:toK road ma/ for im/lementing lasting change.
In order for these /rimar, elements to function /ro/erl,, the, must +e
im/lemented in the form of stages or J+uilding +loc(s.K S/eci2c foundation
/rerequisites must +e met /rior to de/lo,ment of su+sequent stages. The
initial stages contain criteria that must +e satis2ed +efore im/lementing
su+sequent stages. These criteria are li(e the /rerequisites for some college
courses. The 2rst:le0el acti0ities must +e com/leted to ser0e as +uilding
+loc(s for su+sequent stages. It is im/erati0e that these stages +e followed to
a0oid Feo/ardiIing the im/lementation and to assure success in de/lo,ing
the lean manufacturing /rogram as quic(l, as /ossi+le for ma"imum +ene2t.
Part III of this +oo( will identif, those stages and e"/lain the a//ro/riate
sequence for im/lementation.
Lean manufacturing, as descri+ed in this +oo(, is /rimaril, focused on
designing a ro+ust /roduction o/eration that is res/onsi0e, Le"i+le, /redicta+le,
and consistent. This creates a manufacturing o/eration that is focused
on continuous im/ro0ement through a self:directed wor( force and dri0en
+, out/ut:+ased measures aligned with customer /erformance criteria. It
de0elo/s a wor(force with the ca/a+ilit, to utiliIe the lean tools and techniques
necessar, to satisf, world:class e"/ectations now and into the future.
As noted +, onner in
Managing at the S)ee& o* Change+
JPeo/le can onl,
change when the, ha0e the ca/acit, to do so. A+ilit, means ha0ing the
necessar, s(ills and (nowing how to use them. )illingness is the moti0ation
to a//l, those s(ills to a /articular situation.K
5
#iewing lean manufacturing
from a holistic /ers/ecti0e should +e a+le to satisf, the need to ha0e +oth
a+ilit, and willingness.
6
:
'ean Manufacturing
Approac$
he 2rst ste/ required on this Fourne, toward creating a lean manufacturing
en0ironment is to recogniIe where we are currentl,. )e must
demonstrate an understanding as to wh, we need to change, and we
must determine wh, it is im/ortant that we ma(e a change. )hat are the
+usiness dri0ers that ha0e caused this intrusion of lean manufacturing into
our li0es and wh, should we care to /artici/ateR Answers to these questions
are required in order for /eo/le to +ecome engaged in the change /rocess.
How we handle the res/onses to these questions is critical to our success.
Moti0ation, tenacit,, leadershi/, and direction all /la, (e, roles in the successful
de/lo,ment of a lean /rogram. If we as indi0iduals are not moti0ated
to go down this /ath, if we do not ha0e a direction to guide our ne"t ste/s,
and we do not ha0e the tenacit, to sta, with the Fourne, when it +ecomes
+um/,, we ma, as well not +egin.
In order to understand the current situation, we ma, need to conduct a
self:assessment that will /ro0ide a sounding +oard or reLecti0e mirror for
our o/erating condition as it stands toda,. It will /ro0ide feed+ac( regarding
where we currentl, demonstrate ca/a+ilit,, and it will re0eal ga/s +etween
how things are +eing done toda, and what are considered to +e sound lean
/ractices. To /ro0ide some le0el of insight into this ga/, one need onl, to
loo( at the landmar( MIT stud, conducted +, )omac(, Gones, and !oos
Csee
The Machine That Change& the $orl&
D to understand how far some
o/erations are from +eing lean. -acilities that are considered lean o/erate
with far fewer resources as com/ared to those facilities that o/erate as mass
/roducersB JLean /roduction 0s. mass /roductionB 7/3 the human e1ort in
"
?
the factor,, 7/3 the manufacturing s/ace, 7/3 the in0estment tools, 7/3 the
engineering hours, 7/3 the time to de0elo/ new /roducts.K
3?
It is onl, when we are honest with oursel0es as to where we are that
/rogress can reall, +egin to ma(e signi2cant change. $enchmar(ing against
a de2ned criteria and determining our /erformance ga/ are wa,s to +egin
+uilding a stor, line for wh, we need to change Csee -igure 73.3D.
It is this stor, line that must +e communicated to the organiIation in
order to win su//ort for a change /rogram. $, the time com/an, leaders
come to the conclusion that the, need to change the com/an,, it is usuall,
after se0eral months or ,ears of seeing /ro2ts shrin( through re0enue loss at
the to/ line or mar(et share erosion. Usuall,, the, ha0e +een loo(ing at the
data and re0iewing the num+ers for quite some time. )hen the, 2nall, do
come to the ine0ita+le conclusion that change is necessar,, these same leaders
need to inform the entire organiIation as to the sco/e of what the, are
changing and wh,. Hne cannot de/lo, a maFor change such as lean
manufacturing
and e"/ect it to endure without engaging the entire wor( force. If
one does not /resent a com/elling stor, as to wh, change is necessar,,
em/lo,ees are not li(el, to +ecome engaged with the /rogram. This is not
to sa, that those initiating the change will ha0e all the answers at this initial
/hase C+ecause the, wonPtDM howe0er, the, should +e a+le to e"/lain wh, it
has +ecome necessar, to conduct +usiness in a di1erent manner.
After ha0ing gone through the self:assessment and reaching agreement
that there is a need for change, the ne"t ste/ is to assem+le a team to design,
de0elo/, and de/lo, the lean manufacturing /rogram. There are some general
guidelines to follow when selecting a team and formall, launching a /roFect.
-irst, the team must +e full timeM /art:time teams gi0e /art:time results. If
this /roFect is not serious enough to launch with full force, do not +other to
+egin. Part:time mem+ers are onl, /artiall, dedicated, which means the,
ha0e other /riorities and are not com/letel, focused on the tas( at hand. It
is +etter to dedicate three /eo/le full time than to sta1 a team with 73 /arttime
resources. Part:time teams sim/l, do not wor(.
Second, roles within the team and the wa, in which team mem+ers
interact with one another are quite im/ortant. It is im/erati0e that all mem+ers
understand their roles on the team and wh, the, were selected for the
assignment. )hen assessing /roFect team candidates, it is im/ortant to (ee/
in mind selection criteria and to ha0e an understanding of what attri+utes
are required. The following would +e a good starter list of desired attri+utesB
A
H/en minded
A
.1ecti0e communicator
@
A
!esults oriented
A
Self:con2dent
A
!esilient to change
A
hallenger of the
stat"s -"o
A
9rou/ facilitator
A
Trusted Fudgment
A
InLuential within the organiIation
In addition to each team mem+erPs e"/erience and e"/ertise, an indi0idualPs
/reference toward ta(ing on a /articular role is an im/ortant factor in
the successful outcome of a teamPs a+ilit, to deli0er a /roFect. Meredith
$el+inT
has done a signi2cant amount of research in this area and has concluded
that team role /reference can ha0e a considera+le im/act as to whether
a team will /erform successfull, or not. UtiliIation of his material can /ro0ide
some 0alua+le insight into the a//ro/riate ma(eu/ of /roFect teams.
After the team has +een selected, the, must +e mo+iliIed. To accom/lish
this, the team will need to generate two (e, documentsB a /roFect charter and
/roFect milestone /lan. The charter de2nes the /roFectPs /ur/ose, o+Fecti0es,
and outcomes. The milestone /lan identi2es maFor segments of the /roFect,
the time frame for com/letion, and a sequence of maFor e0ents. The milestone
/lan should +e +ased on a lean manufacturing road ma/ C-igure 3.7D, which
/ro0ides a common understanding for the team as to s/eci2c /hases of the
/roFect.
T Meredith $el+in is a $ritish /rofessor who has conducted nearl, 54 ,ears of research on
teams, team d,namics, and de0elo/ing insight into what ma(es successful teams wor( Csee
$el+in AssociatesP )e+siteB www.+el+in.comD.
;igure :/7 'ean Manufacturing Road Map
7A
In addition to the /roFect charter and milestone /lan, the following elements
should also +e considered as necessar, ingredients for the /ractice of
good /roFect managementB
A
ProFect /rotocol Cteam meeting time, /lace, duration, formatD
A
ProFect organiIation Csteering committee, /roFect owner, leader, etc.D
A
*e2ned roles/res/onsi+ilities Cfor organiIation structureD
A
!is( mitigation management Cidentif,ing and resol0ing /otential ris(D
A
HaIard escalation management Crules for ele0ating /ro+lemsD
A
ProFect schedule Cdeli0era+les, ownershi/, de/endenc,, resourcesD
A
Issue log Ccatalog of /roFect issues, action, dates, ownershi/D
A
ProFect +oo( Cli0ing and historical documents of the /roFectD
The team:generated charter and milestone /lans Csee -igures 77.7 and
77.3D /ro0ide the 2rst documented clari2cation of /roFect e"/ectations for
e"ecuti0e management and the /roFect team. These documents are to +e
agreed to and signed o1 on +, all /arties in order to minimiIe the ris( of
missed e"/ectations down the road. It is at this time that an announcement
should go out to the rest of the organiIation e"/laining what is a+out to ta(e
/lace in regard to the lean /rogram. This communication shouldB C7D e"/ress
the need for loo(ing at doing +usiness di1erentl,, C3D identif, who ma(es u/
the /roFect team, C5D re0eal the /roFect milestone /lan, and C6D clarif, for
em/lo,ees what this /roFect means to them.
Hnce the /roFect team has com/leted the initial de+rie2ng with management,
the, are read, to +egin detailing the lean /roFect elements, which would include
the /roFectPs deli0era+les Cthose 0er, +lac(:and:white, tangi+le /ieces of
e0idence
that /ro0ide /roof that an acti0it, is com/leteD, the de2ned wor( content
for each of the /roFect deli0era+les with assigned ownershi/ Cres/onsi+ilit,,
accounta+ilit,, and authorit,, or !AAD, the esta+lishment of resource staUng
requirements, and the teamPs agreement on /roFect management /rotocol.
Hnce the team is u/ and o/erating, it is time to get down to +usiness.
-or the team, this means wor(ing their wa, through each of the lean road
ma/ /hases. The 2rst /hase, that of Lean Assessment C-igure 3.3D, is used to
determine how the o/eration stac(s u/ area +, area and /roduct grou/ +,
/roduct grou/ from a lean manufacturing /ers/ecti0e. In this /hase, the team
tries to understand where areas of o//ortunit, and le0erage /oints e"ist
within the +usiness. The, +egin +uilding the stor, line for not onl, wh, the
+usiness needs to change +ut also where and how much. This assessment
loo(s at /rocess /erformance issues relating to the -i0e Primar, .lements +,
identif,ing waste or JmudaK o//ortunities that e"ist within the +usiness.
77
In addition to the internal search for o//ortunit,, the outline of a manufacturing
strateg, is de0elo/ed in order to assure alignment of the lean
initiati0es with the mar(et/lace and to /ro0ide insight for the a//ro/riate
design criteria that are to +e utiliIed in /hase three, -uture State *esign. As
Hunt clari2ed in
Process Ma))ing+ (ow to Reengineer 4o"r B"siness Processes
,
it is necessar, to understand the customerPs /erformance e"/ectations +efore
designing a solutionB JTo sim/lif, ,our /roduct and /rocess s,stems design,
the /rocess im/ro0ement team must 2rst understand the customerPs real
requirements and /riorities.K
77
This manufacturing strateg, outline will identif, which /roducts com/ete
in what mar(ets and wh,. It also e"/lores maFor com/etitors to understand
the com/etiti0e criteria required for certain mar(ets and determines where
the team needs to le0erage the change /rogram to gain alignment with the
current and desired customer +ase. 9unn em/hasiIed this in his +oo(,
Man"*act"ring
*or Co!)etitive A&vantage+ Beco!ing a $orl& Class Man"*act"rer
B
JIt is im/erati0e to ascertain to the e"tent /ossi+le how e1ecti0el, the
com/etitors
can manufacture /roducts.K
?
$, aligning with mar(et/lace requirements,
the /ro+a+ilit, of le0eraging +ottom:line +ene2t for the +usiness
increases tremendousl,.
After Lean Assessment is com/lete, a second de+rie2ng is conducted with
e"ecuti0e management to re/ort the 2ndings and gain a//ro0al to mo0e on
to the ne"t /hase, that of documenting the urrent State 9a/ C-igure 3.5D.
The urrent State 9a/ /ro0ides the +aseline measure of where the com/an,
is toda,. In this /hase, the teamB
;igure :/: P$ase 7: 'ean Assessment
'ean Manufacturing Implementation F(er(ie-G
'ean Manufacturing Performance Assessment
F&urrent State PerformanceG
Manufacturing Strategy
F&ompetiti(e &riteria0Market SegmentationG
7 day
:H= days
:H= days
7 day
7:
A
!ecei0es training in /rocess 0alue anal,sis CP#AD, lean manufacturing
/rinci/les, and lean anal,sis tools
A
.sta+lishes /rocess lin(ages through material and information Low
ma//ing
A
Suanti2es where o//ortunities e"ist for waste elimination
A
9enerates design criteria +ased on the mar(et/lace
A
reates a SIPH Csu//lier:in/ut:/rocess:out/ut:customerD ma/ of all
the maFor o/erational /rocesses in order to understand customer/su//lier
relationshi/s and required in/uts and out/uts that trigger these
/rocesses
A
Anal,Ies current /erformance le0els in regard to /roduction loss
function and waste elimination o//ortunities in order to /rioritiIe
im/lementation sequence and address ris(
A
*e0elo/s a Jquic( hitK list for short:term im/ro0ements and esta+lishes
a +aseline for demonstrated im/ro0ement
If this last item is gi0en a//ro0al +, e"ecuti0e management, the shortterm
im/ro0ements will +e de/lo,ed as /art of the third /hase. This would
allow the com/an, to +egin realiIing +ene2ts quic(l, and to initiate sel1unding
of the change /rogram. In addition, it allows /eo/le to see action
and results right awa,.
After in0esting 5 to ? wee(s to gain an understanding of the current state
and to con2rm that understanding with the maFor /rocess owners, a
management
de+rie2ng is conducted to inform e"ecuti0e management as to what
was disco0ered. ."ecuti0e management a//ro0al allows rite of /assage to the
third /hase, which is focused on the -uture State *esign C-igure 3.6D. In the
-uture State *esign /hase, the /roFect team /uts together an o0erall conce/t
;igure :/< P$ase :: &urrent State Gap
'ean Manufacturing and P+A "raining
&urrent State Mapping
Fmaterial0information Io- and SIP&G
Root &ause Analysis
Floss function and issue0element matrixG
<370: days
7H< -eeks
7H: -eeks
: days
7<
design of how the site should o/erate. This /rocess will ta(e a//ro"imatel,
3 to 5 wee(s and includesB
A
*etermining what /roduct grou/ings e"ist and how the, would +e
/roduced
A
9enerating a general organiIation structure
A
Producing a +loc( la,out for the /lant
A
Anal,Iing /roduct demand +eha0iors and material/information Low
A
Pro0iding team training for the o0erall o/erations management structure
C/ossi+l, including site 0isits to other lean o/erationsD and e"/osure
to di1erent manufacturing architectures
A
on2rming the conce/t design with maFor /rocess owners
A
*e0elo/ing a new demand management /rocess for logistics Corder
launch to /roduct deli0er,D
The teamPs conce/t design is /resented to e"ecuti0e management for
re0iew and a//ro0al. )hen +lessed, the team focuses the ne"t 5 to 6 wee(s
on the second half of /hase three, the de0elo/ment of a detail design. The
outcomes of this detail design includeB
A
Sho/Loor staUng /lans
A
ell wor(load anal,sis
A
Transition strateg,
A
Im/lementation /lan
A
*e2ned e"it criteria
;igure :/= P$ase <: ;uture State 4esign
perations Management "raining FManufacturing ModelsG
&oncept 4esign
Plant &ommunication
70: day
7H: -eeks
7 day
:H< -eeks
7 day
: days
4etail 4esign
Fimplementation plan and transition strategyG
7=
A
Sho/Loor organiIation roles and res/onsi+ilities
A
on2rmation of the detail design with maFor /rocess owners
A
Sho/Loor training /rogram
A
ommunication /rogram
This /ac(age is /resented to e"ecuti0e management for a//ro0al. U/on
agreement as to the lean /rogram rollout, a communication regarding the
im/lementation /lan should go to all em/lo,ees e"/laining what was disco0ered,
who was in0ol0ed, what was decided, where the organiIation is going,
and where all em/lo,ees 2t in. It is at this time that the /roFect team mo0es
into the fourth /hase, Im/lementation.
&ow that the team has s/ent the last = to 7; wee(s on assessment, anal,sis,
design, and /lanning, it is time for the real action to +egin. The in0estment
in time and resources s/ent u/ front to understand the current /rocess and
design the future state can now quic(l, /a,o1. It is through the de2nition
of a design criteria, the descri/tion of mar(et/lace and customer 0alue
o//ortunities,
and the esta+lishment of im/ro0ement initiati0es around /roduct
grou/ings that alignment of the lean manufacturing /rogram will le0erage
ra/id +ene2ts during de/lo,ment. This logic is similar to that descri+ed +,
)omac( and Gones in
Lean Thinking+ Banish $aste an& Create $ealth in 4o"r
2rgani3ation
B JA 2rm might ado/t the goals of con0erting the entire organiIation
to continuous Low with all internal order management +, means of
a /ull s,stem. The /roFects required to do this might consist ofB C7D reorganiIing
around /roduct families, with /roduct teams ta(ing on man, of the
Fo+s of the traditional functionsM C3D creating a Vlean functionP to assem+le
the e"/ertise to assist the /roduct teams in the con0ersionM and C5D commencing
a s,stemic set of im/ro0ement acti0ities to con0ert +atches and
rewor( into continuous Low.K
3;
The im/lementation of manufacturing cells is now conducted though a
series of stages 0ia JNaiIen e0ents.K These stages ser0e as +uilding +loc(s and
set the foundation for su+sequent stages C-igures 3.; and 3.?D. -or e"am/le,
im/lementation of the 2rst stage includesB
A
.sta+lishing the +aseline cell design
A
$alancing the cell to ta(t time
A
*ocumenting the standard wor( content
A
.sta+lishing 0isual controls
A
reating the o/erating rules
A
Introducing intra:cell material /ull
A
*e2ning team roles and res/onsi+ilities
75
;igure :/5 Implementation Met$odology
;igure :/> 'ean Manufacturing Principles
7>
)hen the one:wee( NaiIen e0ent is o0er, the second wee( is s/ent twea(ing
the /rocess and allowing for adFustments. This is due to the fact that not
e0er,thing can +e im/lemented in its 2nal form during the 2rst wee(. After
a+out ? wee(s of o/eration, the /rocess should +e sta+iliIed and /erforming
at targeted /erformance le0els. At this /oint, a lean manufacturing audit Csee
-igure 73.6D should +e conducted to ma(e sure the im/lementation is e"hi+iting
lean manufacturing characteristics and has demonstrated a signi2cant
change in /erformance C-igure 3.<D.
Hnce the cell is /erforming at the desired le0el and has /assed the audit,
the cell team is allowed to /ursue the second stage, which is de/lo,ed in the
same manner as stage oneM howe0er, this stage focuses onB
A
!a/id utiliIation of single:minute e"change of dies CSM.*D
A
.sta+lishment of a formal total /roducti0e maintenance CTPMD /rogram
A
Incor/oration of Po(a:,o(e de0ices
A
UtiliIation of statistical /rocess control CSPD
A
Team mem+er cross:training
A
UtiliIation of continuous im/ro0ement tools
A
*e/lo,ment of inter:cell /ull s,stem
Again, there is a ?: to <:wee( /eriod for sta+iliIation to ensure that desired
/erformance le0els are +eing achie0ed and to conduct a formal audit. Hnce
the second stage is com/leted, the cell team quali2es for ad0ancement to the
;igure :/6 Expected Bene)ts
76
third and 2nal stage, which is reall, where world:class /erformance ca/a+ilities
are achie0ed through the cellPs ca/a+ilit, toB
A
Perform mi":model manufacturing
A
*eli0er ma(e:to:order /roduction
A
on0ert to a one:le0el +ill of materials C$HMD
A
Ta(e ad0antage of 2nished:goods 0ariation techniques
A
Su//ort Le":fence demand management
A
UtiliIe material +ac(Lushing
A
onduct a failure mode and e1ects anal,sis C-M.AD
A
alculate /rocess ca/a+ilit, C/ND
A
ontri+ute to the assessment of /roducts through design for manufacturing/
assem+l, C*-MAD /rinci/les
-or /ur/oses of ris( mitigation, the 2rst cell needs to +e de/lo,ed as a
/ilot cell, where o0er ;4W of all lessons learned are o+tained. a/turing those
lessons learned and utiliIing them during the de/lo,ment of su+sequent
/roduction cells is in0alua+le. As each cell is im/lemented and +ecomes
selfsustaining,
loo( to lin( indi0idual /roduction cells together through customer/
su//lier alignment with inter:cell Nan+ans. It is im/ortant to ma(e
sure that indi0idual cells are sta+le +efore interconnecting them with other
cells. If the, are not, the internal su//l, chain is /ut at ris(.
Hnce ;4W of the /roduction cells are in stage two and well on their wa,
toward self:sustaining im/lementation, it is time to ta(e the focus of the
/roFect team o1 the sho/ Loor and to +egin to /ursue im/ro0ements in other
areas of the +usiness. This is in (ee/ing with the ad0ice gi0en +, Imai in
Ge!ba 5ai3en
B J9em+a NaiIen +ecomes the starting /oint for highlighting
inadequacies in other su//orting de/artments and identi2es s,stems and
/rocedures that need to +e im/ro0ed.K
73
The 2rst area to address, therefore,
would +e that of customer interface for order /rocessing and demand
management.
$, this time in the /roFect, enough im/ro0ement has +een demonstrated
on the sho/ Loor that it is time for the team to wor( its wa, down
the 0alue stream toward the customer +ase.
The second area of focus would +e that of /roduct de0elo/ment. &ow
that the sho/ Loor has a greater understanding of its ca/a+ilit,, the, can
deli0er e"tremel, 0alua+le insight into /roduct designs and also contri+ute
to the new /roduct de0elo/ment /rocess. The third area of focus would +e
redesign of the organiIation from where it is now to something that is more
reLecti0e of the new manufacturing architecture, where form would +egin
to follow function. The fourth area would +e that of the e"ternal su//l, +ase.
7?
&ow that a solid wor(ing model e"ists inside the factor, and con2dence has
+een gained in using the lean tools and techniques, it would +e a//ro/riate
for the /roFect team to wor( u/ the 0alue stream toward the su//lier +ase.
.0en though these initiati0es are listed in a serial manner, the, can +e
addressed in /arallelM howe0er, that is onl, recommended with a word of
caution. A com/an, has onl, so man, resources and realisticall, cannot
address more than three to 20e com/an,:wide initiati0es at an, one time. In
addition, if lean manufacturing cannot +e demonstrated at ,our own facilit,,
it would not +e wise to e"/ect a customer or su//lier to Fum/ on +oard
unless the, ha0e alread, +een conducting lean manufacturing initiati0es
within their facilities. Some acti0ities can +e done in /arallel, +ut +e aware
of ca/a+ilit, surrounding the entire su//l, chain. !emem+er that a chain is
onl, as strong as its wea(est lin(.
Ingersoll .ngineers, in
Making Man"*act"ring Cells $ork,
/ro+a+l, +est
summariIed this o0erall a//roach to lean manufacturingB JThe greatest +ene2ts
are realiIed quic(l, in com/anies that include all a1ected functions from
the +eginning of the Le"i+le manufacturing cell C-MD /roFect. Xells sim/l,
donPt wor( well, if at all, when the, are not /art of an o0erall strateg, of
change underta(en +, their users. ells standing alone are worthless. The,
are isolated islands remote from the rest of the world.K
75
-or an, /roFect team
to +e successful, a num+er of /roFect management assum/tions are required
C-igure 3.@D.
The one 2nal question that remains for management to address to ensure
a successful conclusion to the lean manufacturing /rogram is JAre ,ou willing
to do what it ta(es to +ecome a world:class manufacturing organiIationRK
C-igure 3.=D. If management is not willing to commit to these issues, then it
is not recommend that the, /ursue de/lo,ment of a lean manufacturing
/rogram. If these (e, ingredients are not /resent within the s/irit of the
o/eration, the im/ro0ement initiati0e will struggle se0erel, and often time
result in failure.
;igure :/? ProCect Management Assumptions
J "$e proCect -ill 2e gi(en t$e time necessary to deploy/
J "$e proCect -ill 2e gi(en resources Ffunds and peopleG/
J "$e proCect -ill 2e gi(en a full3time0focused team/
J "$e proCect -ill 2e gi(en clear expectations/
J "$e proCect -ill $a(e an identi)ed management sponsor/
J "$e proCect -ill $a(e access to management guidance/
7@
Part I of this +oo( has /ro0ided insight into the o0erall as/ects of a holistic
lean manufacturing /rogram and has demonstrated how to set u/ and manage
a lean /rogram. Part II will descri+e in greater detail each as/ect of the
-i0e Primar, .lements of lean manufacturing.
;igure :/@ 8Are You *illing "oKE9
J &an you impact production for 7 -eekE : -eeksE < -eeksE
J &an you dedicate < to ? people for > to @ mont$sE
J &an you endure failure and mistakes 2efore success
and impro(ed performance are fully reali!edE
J &an you pro(ide commitment# e(en -$en you do not see maCor
results after : mont$sE
J &an you $old t$e course for 7? to := mont$sE
II
;I+E PRIMARY
E'EME1"S
:<
<
rgani!ation
Element
ost /roFect managers recogniIe that culture is one of the toughest
things to change in an, com/an,. $, de2nition, a com/an,Ps culture
is Jthose acti0ities that go on within a com/an, when management
is a+sent.K A com/an,Ps culture contri+utes signi2cantl, in the
formation of an organiIationPs +eha0ior and can +e diUcult to alter. $eha0iors
that relate s/eci2call, to a com/an,Ps informal o/erating s,stem ha0e
usuall, +een culti0ated o0er man, ,ears and ma, not su//ort or align with
new continuous im/ro0ement initiati0es. A lean manufacturing im/lementation
cannot sur0i0e within an old culture that does not su//ort a new
o/erating en0ironment.
Man, questions are as(ed +, management and em/lo,ees ali(e when facing
a lean manufacturing im/lementation with its newl, de0elo/ed res/onsi+ilities.
)ho has ownershi/ for /roductsR )hat ha//ens when a /roduct lea0es
the cellR Is our touch la+or wor(force cross:trained suUcientl, to o/erate in
a lean en0ironmentR )hat does a cell mean to our com/an,R *o we in0ol0e
the unionR *o we alread, ha0e cell leaders, or should the, +e inter0iewed and
selectedR )ho re/orts to the cell leaderR )hat is the role of a cell leaderR Is it
Fust touch la+orR Is it /roduction controlR Is it /roduction engineersR Is it
qualit, ins/ectionR
All of the a+o0e are e"cellent questions and are usuall, o0erloo(ed when
a lean manufacturing im/lementation is limited to equi/ment rearrangement
and sho/Loor la,outs. There are o0er a doIen di1erent cultural issues in0ol0ed
with these questions, and an, one of them can sto/ an im/lementation dead
in its trac(s. Most factories toda, still require human resourcesM therefore,
M
:=
/eo/le /la, an instrumental role in the success or failure of factor, im/ro0ement
initiati0es. Man, initiati0es ha0e failed due to the neglect of these cultural
issues. So how does one handle this inLu" of cultural:related questionsR )hat
methods are utiliIed to tac(le these issuesR To address these questions in a
logical manner, indi0idual areas ha0e +een identi2ed for discussion hereB
7. ommunication Planning
3. Product:-ocused !es/onsi+ilit,
5. Leadershi/ *e0elo/ment
6. H/erational !oles and !es/onsi+ilities
;. )or(force Pre/aration
&ommunication Planning
J)hatPs in it for me and where do I 2t inRK If ,ou want to get /eo/lePs attention,
nothing /iques their interest more than threatening their Fo+s or changing the
wa, in which the, do their wor(. *o not (ee/ them in the dar( a+out the
/ro/osed changes. -ear is the human emotion that (ee/s us alert during times
of duress and (ee/s us ali0e in situations of great danger. -ear is a moti0ator.
)hen indi0iduals are threatened +, actions that ha0e the /otential to im/act
their li0elihood, the, /rotect and tr, to /reser0e those things o0er which the,
ha0e control and fend o1 those o0er which the, do not. Thus, it is +est not
to generate fear of an initiati0e +efore it e0en gets o1 the ground. *e0elo/ a
communication /lan that is focused at three le0els within the organiIation,
and tailor the content and su+Fect matter to each C-igure 5.7D. UtiliIe 0arious
forms of media to distri+ute the message and /ro0ide a clear understanding
;igure </7 &ommunication Planning ,ierarc$y
Executi(e 'e(el: Education
FBrie)ng# ProCect Re(ie-s# Site +isits#
4emonstrations# Seminars# etc/G
Middle Mgt/ 4e(elopment: "raining
FPresentations# Status Reports# Skills "raining#
;ace3to3;ace Interactions# etc/G
.pdate t$e Masses: Information
F1e-sletter# "o-n ,all# &ommunication Boards#
Meeting 1otes# &ulture "esting0;eed2ack# etc/G
2rgani3ation le!ent
:5
a+out what is required for each audience. ."ecuti0e management requires
understanding and the a+ilit, to a//ro0e. Middle management needs a
signi2cant
amount of education and training. The masses require 0alidation and
assurances that the, are included in the /roFectPs de/lo,ment.
)hen /resenting the /lan to the di1erent le0els within the organiIation,
ma(e sure the following four questions are answered as a /art of the
communications
C-igure 5.3DB
7. )h, are we changingR
3. )hat are we changingR
5. )here are we nowR
6. )hatPs in it for meR
h! Are e Changing"
Put together a /resentation that is a//lica+le to all em/lo,ees in the
organiIation.
It should +e a relati0el, high:le0el +rie2ng thatB
7. *escri+es wh, the +usiness is ma(ing a change in this direction C+usiness
en0ironment, com/etiti0e /osition, mar(et o//ortunit,, etc.D
;igure </: Aspects of &ommunication Planning
:>
3. ."/lains how 0arious em/lo,ees will 2t into the new en0ironment Cwho
could +e a1ected, le0els of management, /otential role changes, etc.D
5. lari2es o/erational e"/ectations Ce.g., 5;W im/ro0ement in o/erational
/erformance, 33W increase in mar(et share, 7@W reduction in
total costsD
hat Are e Changing"
Show an o0erall /roFect /lan that addresses such issues as +udget Cwhere the
mone, is coming fromD, im/lementation schedules, maFor milestones, and
areas in0ol0ed in the de/lo,ment.
here Are e #o$"
*escri+e the stage of the game at which the /roFect is currentl, residing.
Pu+lish a regular newsletter or e:mail for the sho/ Loor and oUce en0ironment
to (ee/ /eo/le u/ to date with how the im/lementation is /rogressing.
hat%s In It for Me"
Address the following issues from the /ers/ecti0e of the indi0idual em/lo,eeB
7. )here do I 2t into the new organiIationR
3. How will this change a1ect the wa, I /erform m, Fo+R
5. How do I +ene2t or 0alue from this changeR
Addressing these four questions will +egin to engage /eo/le with the change
/rocess and hel/ secure their in0ol0ement o0er the long haul.
Product3;ocused Responsi2ility
Thin( a+out ,our own organiIation for a minute and as( ,ourself this questionB
If a customer called toda, and as(ed who in ,our organiIation was
res/onsi+le for the qualit, and deli0er, of /roduct >>:7536, what would ,our
answer +eR If there is a deli0er, /ro+lem, do we turn to /roduction controlR
If there is a qualit, /ro+lem, do we turn to ins/ectionR If there is a /roduct
cost issue, do we inquire with accountingR Using such logic to sol0e these
2rgani3ation le!ent
:6
/ro+lems can +e attri+uted to the e0er:/o/ular Jfunctional organiIation.K
.0er,one has a /iece of the action +ut no one has res/onsi+ilit, for the
whole, e"ce/t /erha/s at the /lant manager le0el. As( ,ourself, is the /lant
manager the a//ro/riate /erson to +e addressing s/eci2c questions a+out
/roductsR ShouldnPt the /eo/le with assigned res/onsi+ilit, for the /roduct
+e answering questions a+out the /roductR The answer is ,es. 'es, the,
shouldY
According to Schon+erger in
$orl& Class Man"*act"ring+ The Lessons o*
Si!)licity A))lie&
, this /oint is e"tremel, im/ortant for reducing in2ghting
and waste in the /rocessB J)orld lass Manufacturing C)MD requires organiIing
for quic( Low and tight /rocess:to:/rocess and /erson:to:/erson
lin(ages. The o0erriding goal is to create res/onsi+ilit, centers where none
e"isted +efore. )hen res/onsi+ilit, centers are o/erating, the /rocrastinating,
2nger:/ointing, and ali+iing fadeM the stage is set for con0ersion to a culture
of continuous im/ro0ement.K
7?
How, then, does one +ring a+out this realignment
of ownershi/R
This realignment can +e achie0ed +, addressing three as/ects of lean
manufacturingB
7. *e0elo/ing a res/onsi0e material and information Low infrastructure
CLogisticsM see ha/ter ;D
3. *esigning a Le"i+le manufacturing architecture CManufacturing
-lowM see ha/ter ?D
5. Transitioning ownershi/ through the conce/t of em/owerment
All of these as/ects were referred to +, Mahone, in
(igh6Mi0 Low6'ol"!e
Man"*act"ring
B J.m/lo,ee /artici/ation and em/owerment are results of the
/roduction situation. Attem/ts to em/ower the wor(force and o+tain continuous
qualit, im/ro0ement without a sound underl,ing s,stem of su//ort
are doomed to failure.K
76
The o0erriding /remise here is that the res/onsi+ilit,
for decisions and accounta+ilit, for /erformance are delegated to em/lo,ees
in a gi0en cell when the, ha0e the a//ro/riate le0el of training, tools, and
techniques +, which to em+race this new ownershi/.
A critical change required to su//ort this realignment of ownershi/ is to
ma(e it clear that cells are formed around /roducts and /roducts are the
res/onsi+ilit, of cell mem+ers under the direction of a cell leader. The cell
team has res/onsi+ilit,, accounta+ilit,, and authorit, C!AAD for /roduct
qualit,, deli0er,, cost, and an, other element or as/ect of that /roduct that
is assigned to the cell le0el. .ach cell should +e /ro0ided with the resources
:?
necessar, to carr, out this mission. That does not mean that e0er,
organiIationPs
cells will loo( or +e sta1ed in e"actl, the same manner, +ut it does
mean that each com/an, will assign the a//ro/riate cell resources to match
their gi0en !AA.
An organiIationPs siIe, le0el of manufacturing /rocess com/le"it,, le0el
of cultural maturit, in terms of em/owerment, etc. are all factors in determining
the ma(eu/ of cell organiIation structures. At a minimum, the cell
should +e sta1ed with a dedicated cell leader Cwho could manage more than
one cellD, identi2ed touch la+or /ersonnel, and an, required su//ort
resources Ce.g., /roduction control, /roduction engineers, qualit, /ersonnel,
maintenanceD necessar, to carr, out the mission of the cell team. It ma, +e
2scall, /rudent to dedicate su//ort /ersonnel to more than one cellM howe0er,
each organiIation will ha0e to determine a +est 2t for their own o/eration.
Some organiIations ha0e esta+lished a two:tier structure in which the da,to:
da, acti0ities Cthose occurring within 7 to 54 da,sD are handled at the
sho/Loor le0el and the month:to:month acti0ities Cthose within ?4 to =4
da,sD are managed at a le0el a+o0e the sho/ Loor. This di0ision of la+or
allows for the se/aration of resources for /lanning and e"ecution. !esources
a+o0e the sho/ Loor can concentrate on /re/lanning and /ro+lem /re0ention
without +eing consumed with 2re2ghting ta(ing /lace on the sho/ Loor. The
dedicated sho/Loor resources can focus their energies on the /roduct and
e"ecuting da,:to:da, requirements.
In order for indi0iduals and teams to +e successful in an em/owered
en0ironment, a few ingredients are required C-igure 5.5D. If /eo/le are gi0en
clear e"/ectations, the /ro/er en0ironment in which to concentrate, minimal
interru/tions, immediate and direct feed+ac(, challenging goals, and the
s(ills necessar, to /erform their Fo+s, /ositi0e /erformance results will +e
generated. )hen management creates this en0ironment and nurtures these
conditions, em/owered, self:directed teams can Lourish.
;igure </< "o Be Successful# People *antK
J A clear o2Cecti(e
J 1eed for intense concentration
J 'ack of interruptions
J &lear and immediate feed2ack
J Sense of c$allenge
J Skills ade%uate to perform t$e Co2
2rgani3ation le!ent
:@
'eaders$ip 4e(elopment
As( ,ourself, JAre the sho/ foremen I ha0e running m, sho/ Loor toda, the
leaders I want o/erating cells within m, lean manufacturing en0ironment of
the futureRK This is a 0er, diUcult question for man, /lant managers to
answer +ecause the, ha0e to determine whether the Jdown in the trenchesK
frontline su/er0isors who ha0e gotten the organiIation where it is toda, are
quali2ed to ta(e it to the ne"t higher le0el of /erformance for tomorrow.
)hen an im/lementation considers onl, the /h,sical as/ects of a lean
manufacturing
/roFect, this idea of /ro/er leadershi/ is ne0er addressed. In order
for a wor(force to +e trul, em/owered, it must 2rst +e equi//ed with the
a//ro/riate management s(ills and (nowledge that will ena+le it to set its
direction, maintain control o0er its destin,, and sustain continuous im/ro0ement
after the initial im/lementation team is long gone. This does not
ha//en +, Jteaching an old dog new tric(s.K This is not to sa, that sho/
foremen are not ca/a+le of leading and managing cellsM howe0er, a com/an,
that is transforming to a lean en0ironment is esta+lishing new mini:+usinesses,
not new factor, de/artments. )e are not Jrearranging the dec( chairsK
in this new en0ironment. )e are loo(ing for leaders who can /lan acti0ities,
set o+Fecti0es, manage more than Fust tas(:+ased wor( assignments, and
recogniIe cause:and:e1ect relationshi/s relati0e to /roduct cost. These are
not /ositions to +e 2lled +, indi0iduals who ha0e +een /romoted u/ the
ran(s +ecause of e"cellent sho/ (nowledge. These are +usiness managers who
could 0er, li(el, +e required to interface with outside customers and su//liers.
As stated +, To+in in
Re6&"cating the Cor)oration+ %o"n&ations *or the
Learning 2rgani3ation
B JHrganiIations are +ecoming Latter, with fewer le0els
se/arating the to/ oUcers of the com/an, from the lowest le0els. X)or(
teams, whether within a single function or cross:functional, are +ecoming
(e, organiIational units. The, are +eing gi0en more and more res/onsi+ilities
that used to +elong to higher le0el managers E from /ro+lem sol0ing to
hiring to ma(ing ca/ital in0estments.K
36
#iewing the situation in this light,
who do ,ou want ,our ne"t cell/+usiness unit leaders to +eR
How do ,ou 2nd these future leadersR Man, of them currentl, wor( in
the factor, or at least within the com/an, toda,. onsider, the ne"t time ,ou
are in a meeting that includes em/lo,ees from 0arious functions across the
+usiness, who is e"hi+iting the following characteristics or management
s(illsB /lanning, leadershi/, /ro+lem:sol0ing a+ilit,, team +uilding, technical
com/etenc,, and inter/ersonal communication. These are the /eo/le ,ou are
loo(ing for to 2ll leader roles. These are the /eo/le who will challenge the
stat"s -"o
. These are the /eo/le who will wor( with their direct re/orts to
<A
accom/lish a set of gi0en o+Fecti0es. Howe0er, if ,ou cannot readil, see and
identif, such /ersonnel, do not des/airM there is still ho/e.
$, de0elo/ing and de/lo,ing a formal selection and assessment /rocess,
a com/an, can utiliIe a structured framewor( +, which to select future cell
leaders C-igure 5.6D. It is highl, recommended that some form of a formal
/rocess +e used in the selection of cell leaders for three reasonsB C7D the human
resources de/artment should +e a+le to (ee/ ,ou out of hot water on the
numerous legal issues surrounding em/lo,ee discriminationM C3D ,ou and the
new cell leaders will +e a+le to identif, a training /lan for those s(ills that
are required for the /osition ,et are lac(ing at the time of selectionM and,
most im/ortantl,, C5D ,our new leaders will +e selected out of a 2eld of their
/eers. The, ha0e +een singled out as the J+estK to 2ll this new /osition and
will now directl, +e hel/ing the com/an, succeed with this new direction.
)hat could +e more rewarding for a self:moti0ated indi0idual who has the
desire to lead than to ha0e his leadershi/ qualities recogniIed through a
formal assessment /rocess and to +e selected to manage a cellR )hen this
highl, moti0ated /erson, with leadershi/ and team:+uilding s(ills, is em/owered
to organiIe his team and set a course for continuous im/ro0ement, there
will +e no limit to what this team can accom/lish.
perational Roles and Responsi2ilities
&ow that we ha0e a cell leader and ha0e assigned team mem+ers, we should
+e read, to mo0e on to the ne"t cell, rightR )rongY *o ,ou thin( that within
;igure </= &ell 'eader Selection Steps
&ommunicate
t$e need and
expectations for
cell leader candidates
Pro(ide information
a2out t$e
ne- position
,a(e candidates
pro(ide a selfassessment
and skills analysis
Identify skill gaps#
select cell leaders#
de(elop training plan
&onduct formal
group inter(ie-s
of candidates
Assess candidate
responses and
select for inter(ie-
2rgani3ation le!ent
<7
this new wor(ing en0ironment the traditional functional roles will remain
unchanged and una1ectedR The roles and res/onsi+ilities of +oth touch la+or
and su//ort /ersonnel will +e altered. Some /ositions will +e changed more
than othersM nonetheless, the, all will +e di1erent. The cell teams should +e
sta1ed with the minimum, Le"i+le resources necessar, for them to meet all
o/erational /erformance o+Fecti0es. This will almost certainl, 0ar, from cell
to cell and com/an, to com/an,, +ut the fact remains that we are all doing
more with less in this increasingl, com/etiti0e glo+al world of manufacturing.
In light of this, the num+er one com/etiti0e wea/on that comes to mind
is Le"i+ilit,M therefore, /lan on staUng the cell with at least the minimum it
needs to sur0i0e and allow continuous im/ro0ement to +ecome a moti0ator.
If the cell is de0elo/ed with an o0ersta1ed design, then when im/ro0ements
are generated /eo/le will immediatel, need to +e remo0ed from the cell to
address /roducti0it, o+Fecti0es.
)hen o/erating within a union en0ironment, +e sure to include local
union management /artici/ation during these design e1orts. There will +e
issues that arise when o/erating in a union en0ironment that do not arise
in a non:union en0ironment. The (e, to im/lementing lean manufacturing
in a union en0ironment is o/en and direct communication. How well the
need for change and de2ning JwhatPs in it for meK are communicated to the
organiIation at the launch of the /roFect can go a long wa, toward reducing
conLict at this Functure. &umerous issues will arise when dealing with contract
la+or, such as Le"i+ilit, across la+or classi2cations, a limit to Jindi0idual
Fo+K contract language, method of /a,, ,ears of seniorit,, +um/ing rights,
o0ertime allocation rules, etc. It is not that lean manufacturing cannot +e
im/lemented in a union o/eration Csee case studiesDM it Fust requires additional
considerations. onLict resolution through Foint /ro+lem:sol0ing is
critical to o0ercoming union and com/an, management issues. Limiting
disagreements to the facts and not o/inions, agreeing on the direction to +e
ta(en and /erformance le0els the com/an, needs to achie0e to sur0i0e and
grow, and Foint /ro+lem:sol0ing to achie0e those +usiness results can
signi2cantl,
inLuence how far a lean manufacturing im/lementation will go
and how quic(l,.
The 2rst ste/ in determining the roles and res/onsi+ilities of a cell team
is to esta+lish an agreed:u/on focus Ci.e., mission or charterD for the entire
team on which the, will concur and can channel their collecti0e energies.
This will allow the team to determine the functions required to ma(e the cell
wor(. The second ste/ is to assign which functions the cell team mem+ers
should and should not do. This is achie0ed +, ma//ing out the o/eration,
assigning res/onsi+ilities, and identif,ing the ga/s. The third ste/ is the
<:
de0elo/ment of an o/erational descri/tion or functional s/eci2cation that
de2nes the required tas(s and res/onsi+ilities.
Hnce the functions required to o/erate the cell ha0e +een agreed u/on,
team mem+ers for each indi0idual Fo+ function can write s/eci2c roles. This
will not onl, hel/ to eliminate the gra, areas of functional res/onsi+ilit,, +ut
it will also clarif, for the human resources de/artment what the new Fo+
descri/tions are so the, can utiliIe this documentation to sort out di1erent
/a, grades and title changes. In addition, +, in0ol0ing union re/resentation
u/ front during the de0elo/ment of roles, the, are cogniIant of the changes
and can highlight union contract issues earl, in the /rocess. The, retain
ownershi/ for the 2nal /roduct and can more easil, mitigate concerns that
ma, arise with the local union management.
*orkforce Preparation
Although we introduced Le"i+ilit, earl, in our discussion of o/erational roles
and res/onsi+ilit,, this is where its im/act can +e felt on a minute:+,:minute,
hour:+,:hour +asis. Increasing the s/eed of wor(Low through the cell is one
of the /rimar, o+Fecti0es for lean manufacturingM therefore, those indi0iduals
who actuall, touch the /roduct Csha/e it, mold it, machine it, assem+le it,
etc.D are trul, the onl, 0alue:adding acti0it, from the customerPs /ers/ecti0e
and need to +e e1ecti0el, de/lo,ed when /roducing the /roduct. This means
each touch la+or em/lo,ee ultimatel, will need to +e ca/a+le of o/erating
e0er, /rocess within the cell. This is more easil, said than done, +ut the
transformation has to +egin somewhere. A recommended a//roach to initiating
this transformation is to +uild a s(ills matri" C-igure 5.;D, in which
the /eo/le in the cell are listed on the
y
:a"is and the /rocesses or o/erations
to +e /erformed are listed across the to/ on the
0
:a"is.
-illing out this matri" gi0es the cell team and cell leaders the means to
identif, areas and /eo/le requiring training. A recommended a//roach to
soliciting in/ut C+ecause this can +e a 0er, uncomforta+le /art of the cell
de0elo/ment /rocessD is for the cell leader to as( his touch la+or /ersonnelB
C7D what the, can do well, and C3D what the, cannot do +ecause of an,
limitations Ce.g., union contract, /h,sical conditionsD. *o not as( them what
the, cannot do. This is a negati0e a//roach and /uts the em/lo,ee on the
defensi0e. It will +ecome e0ident soon enough as to what the, cannot do
when the, ha0e to +egin /erforming at multi/le wor(stations. $, incor/orating
a 0alidation /rocess to clarif, what is e"/ected of the Fo+, and 0alidating
/erformance in regard to those clari2ed e"/ectations, the cell leader will +e
2rgani3ation le!ent
<<
a+le to de0elo/ a more accurate /icture of the ca/a+ilit, of the cell. om/anies
should de0elo/ a fair and un+iased 0alidation /rocess. In doing so, the,
ma, +e a+le to ta(e ad0antage of a s(ill:+ased /a, scenario down the road.
In addition to an inquir, as to what the, can do well, as( the em/lo,ee to
ran( their s(ills from strongest to wea(est. This will hel/ esta+lish training
/lan /riorities. After the matri" is com/lete, ,ou should ha0e a /rett, good
idea a+out what areas for im/ro0ement need to +e addressed in the short
term.
As cell team mem+ers +ecome familiar with their new res/onsi+ilities,
accounta+ilit, for /erformance can +egin to +e esta+lished. #alidation of
actual /erformance and the use of control mechanisms that loo( at 0ariation
from /lan +oth su//ort adherence to standards and dri0e continuous
im/ro0ement in the /rocess. It is through this monitoring of the /rocess,
that we can (ee/ our o/erational out/ut /erformance in chec(, as we will
see in the ne"t cha/ter.
;igure </5 &ross3"raining Matrix
<5
=
Metrics Element
n com/arison with the other four elements CHrganiIation, Logistics,
Manufacturing -low, and Process ontrolD, Metrics CmeasurementD is
the element that /ro0ides the /rimar, focus for changing +eha0ior. It is
this element that ensures alignment +etween cell:le0el sho/Loor acti0it, and
higher le0el com/an, +usiness o+Fecti0es. It is this connection that is necessar,
for lean manufacturing im/ro0ements to a//ear on the +ottom line.
This cha/ter will descri+e how em/owerment at the cell le0el to achie0e
o/erational o+Fecti0es leads to im/ro0ed /erformance, resulting in an im/act
on the com/an,Ps +ottom line. The metrics descri+ed will not +e new, +ut
the, ma, +e a//lied and managed in a manner that could +e contrar, to
what some com/anies are accustomed.
&o matter what com/an, or what industr,, we all ha0e our fair share of
metrics. There are metrics on c,cle time, defects /er unit, items shi//ed on
schedule, direct la+or cost, return on net assets C!H&AD, o0ertime, /ercentage
of wor( orders released on time, cost of qualit,, hours of rewor(, cash Low,
in0entor, turno0er, etc. &o com/an, is lac(ing for re/orted measurements of
/erformance. It is recogniIed that com/anies are s/ending 0alua+le resources
collecting, sorting, anal,Iing, and dis/la,ing these /erformance data and
re/orting them on a monthl,, wee(l,, dail,, and sometimes e0en hourl, +asis.
If we, as com/anies, are s/ending this much e1ort on measurement wh, arenPt
all of our organiIation /erforming at J+est:in:classK le0elsR )h, are some of
our organiIations leading the /ac( while others are falling +ehind and some
wa, +ehindR According to Ha,s, )heelwright, and lar( C
D, it could 0er, well +e a matter of
too much data and not enough informationB JMeasurements can /ro0ide
useful information to managers who are tr,ing to identif, the sources of their
I
<>
/ro+lems or the reasons for their success. $ut most measurement s,stems in
/lace toda, do not /ro0ide the (ind of information needed +, com/anies that
see( to create a com/etiti0e ad0antage through manufacturing.K
@
This cha/ter
will e"/lore some measurement formats that will enlighten us a+out this
situation and will e"/lain wh, an understanding of human +eha0ior /la,s as
much of a 0ital role in the success of /erformance im/ro0ement as the metrics
themsel0es.
)e are what we measure. XIm/ro0ement comes onl, from that which
is 0isi+le. XA hidden /ro+lem re0eals nothing. Although these statements
ha0e an element of truth to them, the real /ower of measurement comes
from an indi0idualPs understanding of the measurement itself. The real tric(
to im/ro0ing /erformance comes from an indi0idualPs de2nition, de0elo/ment,
control, and understanding of cause and e1ect as the, are related to
the metric. Metrics that are de0elo/ed +, an outside entit, and forced on a
cell team are not li(el, to /roduce desired results. Metrics de2ned and de0elo/ed
+, a cell team ha0e a higher li(elihood of resulting in a /ositi0e correlation
+etween acti0it, on the sho/ Loor and desired /erformance.
Understanding of the measurement, ownershi/ of its results, and control
o0er the factors that ma(e it rise or fall are all im/ortant features necessar,
for the successful de/lo,ment of a measurement s,stem.
This area of measurement will +e loo(ed at from se0eral di1erent /ers/ecti0esB
7. *uPont model Ca com/an, 0iewD
3. Hut/ut:+ased measures Ca cell teamPs resultsD
5. Process:dri0en measures Cin2nite continuous im/ro0ementD
6. 9oal alignment through /olic, de/lo,ment
;. Measurement de2nition and understanding C/ower to the /eo/leD
4uPont Model: A &ompany +ie-
The *uPont model C-igure 6.7D, which was de0elo/ed +, a -rench engineer
in the 7=64s, is an e"cellent tool to use to generate a Jwhat if K anal,sis utiliIing
a com/an,Ps income statement and the +alance sheet. These time:honored
instruments of the 2nancial communit, are /i0otal documents for reLecting
the o0erall health of a com/an,. It is through the intersection of these documents
that the *uPont model +ecomes 0alua+le as a /erformance measure.
Metrics le!ent
<6
$eginning &et Assets
;igure =/7 4uPont Model
<?
$, +uilding relationshi/s +etween /articular line items it is /ossi+le to
/roduce se0eral di1erent ratios as indicators of /erformance trends. In addition
to monitoring trends, these ratios can ser0e as /oints of reference for
industr, com/arisons, as well as a guide for esta+lishing o/erational goals.
Achie0ement of these goals can +e /la,ed out through a Jwhat ifK scenario to
determine whether im/ro0ement through a change in sales, an increase in
asset turno0er, or lower in0entor, le0els will su//ort o/erational o+Fecti0es.
-or e"am/le, if the /lant can reduce in0entor, +, 37W, then total assets
will decrease and the asset turno0er ratio will increase +, =W. )ith all other
elements remaining equal, this will im/ro0e the return on in0estment C!HID
calculation +, ;W. A second e"am/le would +e if the cost of goods sold
CH9SD is reduced +, <W, then total costs will decrease and net /ro2t will
im/ro0e +, 6W. )ith all other elements remaining equal, this will im/ro0e
the /ro2t margin calculation +, 3W.
This /erformance measurement method is useful at the to/ le0el within
an organiIation to esta+lish o0erall goals and o+Fecti0es within the +usiness.
It is not designed for use at the cell le0el, where 2nancial measurements tend
to +e less tangi+le. At the sho/ Loor, in most cases it is +etter to utiliIe more
tangi+le, /h,sical measures of /erformance.
utput3Based Measurements:
A &ell "eamLs Results
T,/icall,, the onl, e"isting e0idence of measures on the sho/ Loor are measures
+ased on /erformance for a s/eci2c indi0idual em/lo,ee or /iece of
equi/ment Ce.g., how man, hours were /ut in ,esterda, +, -red, or how
man, /arts came o1 machine num+er 65; last shift, or what the ,ield of the
drilling /rocess was last hourD. These are all measures of how a /articular
ste/ in the /rocess is /erforming, and the, focus on what is called
locali3e&
o)ti!i3ation
. om/anies monitor indi0idual o/erations in the manufacturing
/rocess and assign accounta+ilit, and ta(e correcti0e action +ased on
them. The /ro+lem with this t,/e of measurement is that itB C7D dri0es the
wrong +eha0ior for continuous im/ro0ement, C3D does not reall, ha0e /roduct
accounta+ilit, focused on the customer, and C5D rewards o/timiIation of
the indi0idual o/eration +, sacri2cing /erformance of the /rocess as a whole.
Again referring to Ha,s, )heelwright, and lar( C
D, on the su+Fect of /roduct:focused 0s.
/rocess:focused o/erationsB JA /roduct focus, on the other hand, is generall,
easier to manage +ecause of its smaller siIe and total res/onsi+ilit, for a
Metrics le!ent
<@
/articular /roduct or customer. This usuall, results in shorter c,cle times,
faster res/onse to mar(et changes, less in0entor,, lower logistics costs, and,
of course, lower o0erhead.K
@
-ollowing this theme of +eing /roduct focused, a more e1ecti0e measurement
s,stem would +e one that esta+lishes out/ut:+ased measurements for
the cell team around tangi+le /roducts that go to a customer. These t,/es of
measures /ro0ide feed+ac( on the /erformance of the o0erall /rocess relati0e
to the customer. Hut/ut:+ased measures assign accounta+ilit, for all the
o/erations contained within the manufacturing /rocess. !es/onsi+ilit, is
Jcradle to gra0eK for the /roduct. A focus on out/ut measures dri0es continuous
im/ro0ement in that someone is accounta+le to an end customer
for the /erformance of a /roduct and has the res/onsi+ilit, to correct an,
/ro+lems encountered +, that customer.
Two measures that can alwa,s +e used as out/ut measures are /roduct qualit,
Ce.g., ,ield, defects /er unit, returnsD and /roduct deli0er,. Lac( of /erformance
in these areas a1ects the customer /h,sicall,. Price is o+0iousl, another
measureM howe0er, it does not /h,sicall, a1ect the customer the same wa, as
not ha0ing a /roduct or ha0ing a /roduct that does not wor(. These measures
can usuall, +e esta+lished quite easil,M the diUcult /art is determining
organiIational
accounta+ilit, for the /erformance. If the com/an, fails to address
this alignment, the /rogress toward continuous im/ro0ement will +e limited
to localiIed o/timiIation and the o/eration will miss the +ig o//ortunit,.
Process34ri(en Measures:
In)nite &ontinuous Impro(ement
There are two other measurements worth, of discussion which are readil,
understood +, the sho/ Loor and can +e utiliIed to dri0e continuous
im/ro0ement
+eha0ior. Hne is /rocess c,cle time and the other is /rocess qualit,
measured 0ia roll:through ,ield C-igure 6.3D. !oll:through ,ield is the cumulati0e
/erformance of each o/eration in a /rocess. The idea here is that, if a
com/an, is +uilding +etter and +etter /roducts and deli0ering them in less
and less time, then there should +e a /ositi0e correlation to total /roduct cost.
If ,ou are s/ending less time rewor(ing defects, re/lacing scra//ed material,
mo0ing assem+lies around the sho/, and waiting for com/onent /arts, then
o0erall /roducti0it, will im/ro0e. )hen a manufacturing o/eration allows
onl, 2rst:qualit, /roducts to /roceed to the ne"t o/eration and does not let
material sit around in the sho/, then the organiIation is focusing its e1orts
on the acti0ities necessar, to sustain continuous im/ro0ement.
=A
Goal Alignment "$roug$ Policy 4eployment
)e ha0e met the enem, and he is usY An,one who has tried to align a
+ureaucrac, and mo0e it in one direction can certainl, relate to this statement.
$etween the +usiness /olitics, functional silos, misinformation, and
lac( of information, it can +e quite the chore. How, then, does one accom/lish
this seemingl, unachie0a+le tas(R It can +e done through the use of
consistent /olic, de/lo,ment. Another term would +e
(oshin )lanning
,
which was originall, used +, the Ga/anese C-igure 6.5D. The maFor intent
+ehind /olic, de/lo,ment is to steer an entire organiIation in the same
o0erall direction. )hen an entire organiIation is /ulling in the same direction,
it is much easier to ta(e correcti0e action and adFust the course. If a
com/an, is /ulling in se0eral di1erent directions, not onl, does it use u/ a
tremendous amount of energ,, +ut it also is more diUcult to realign to a
new direction.
As a com/an, +egins to de2ne its direction through a sim/le mission
statement, it must esta+lish a strateg, that achie0es that mission. In turn, this
strateg, +ecomes su//orted +, s/eci2c o/erational o+Fecti0es that must +e
e"ecuted and coordinated across the organiIation. It is at this /oint that
alignment through /olic, de/lo,ment is required. Polic, de/lo,ment can +e
com/ared to requirements cascading down a staircase. At each le0el within
the +usiness, a se/arate set of o+Fecti0es and goals can +e de2ned. A statement
of the o+Fecti0es at a di0ision le0el would +e di1erent than those at a
de/artment
or sho/ Loor le0elM ne0ertheless, the, can all +e aligned to the same
com/an, o+Fecti0e. -or instance, A$ om/an, wants to increase mar(et
share +, 74W in a /articular segment of the glo+e, and the, ha0e determined
;igure =/: Process34ri(en Metrics
Metrics le!ent
=7
that the wa, to accom/lish this is through im/ro0ing the s/eed of /roduct
deli0er, to the customer. This requires a /erformance change from a 5:wee(
lead:time down to 7 wee(. In order to achie0e this, manufacturing and
/urchasing ha0e s/eci2c actions the, must ta(e that su//ort this com/an,
o+Fecti0e. Manufacturing needs to re0iew how /roduct is Lowing through
the factor, toda, and see where the, ha0e waste in the /rocess. The, need
to 0erif, if the necessar, s(ills and ca/acit, are a0aila+le to handle the
increased 0olume. Purchasing needs to wor( with the su//lier +ase to reduce
re/lenishment lead:time so in0entor, le0els do not rise along with the
increased 0olume and to ma(e sure that communication channels for changes
in demand are timel,.
The demonstrated alignment of these o+Fecti0es in the /lanning stages
and the constant communication feed+ac( during im/lementation allow
/olic, de/lo,ment to wor(. It /ro0ides total 0isi+ilit, to the organiIation so
that e0er,one can see where the, 2t into the success of the com/an,. It focuses
the organiIation on /lanning the wor( and wor(ing the /lan. The regular
re/orting of /rogress is necessar, in order to understand the current status
and to ta(e correcti0e action. HrganiIations are a s/ider we+ of
interrelationshi/sM
therefore, it is im/erati0e that each function understands the
im/act of +usiness changes on the other functions.
;igure =/< ,os$in Planning Process
=:
An organiIation should limit itself to three to 20e com/an,:wide initiati0es
at an, one time. An, more than that lea0es a /late that is too full and
detracts from the o0erall focus of the com/an,. There will +e too man, Z7
/riorities and not enough resources to co0er all commitments. Initiati0es will
ta(e longer to com/lete, and the qualit, of the deli0era+les will su1er. Nee/
the /late managea+le. As one /roFect 2nishes u/, add a new initiati0e and
dri0e each to com/letion. Polic, de/lo,ment does not guarantee that a com/an,
will ma(e its goalsM howe0er, it is /racticall, guaranteed that a com/an,
will not reach its goals if it cannot e0en achie0e them on /a/er.
Measurement 4e)nition and .nderstanding
Indi0iduals are more li(el, to stri0e and achie0e a /erformance target the,
understand as o//osed to one the, do not. If measures are +eing /osted in a
wor( area +, an outside entit, and are not com/letel, understood +, those
+eing measured, it is not li(el, that /erformance in that area will im/ro0e. If
/eo/le cannot descri+e their measure of /erformance, do not own that measure,
do not re/ort on the measure, nor understand cause and e1ect relati0e
to the measure, then it is unrealistic to e"/ect the measure to im/ro0e. Here,
we can draw u/on the e"/erience of Gohn 9. $elcher, long:time 0ice /resident
of the American Producti0it, enter, who stated in his +oo(,
Pro&"ctivity Pl"s+
(ow To&ay7s Best R"n Co!)anies Are Gaining the Co!)etitive &ge
B JAn organiIation
that tries to realiIe signi2cant /roducti0it, im/ro0ement without the
/artici/ation and su//ort of its em/lo,ees is wor(ing against itself. It doesnPt
ma(e much sense to em+ar( u/on a maFor underta(ing when the +ul( of the
organiIation misunderstands E or worse ,et, resists E the o+Fect of that
underta(ing.K
7
In order for a cell team measurement s,stem to wor(, it is
necessar, that the metrics +e de2ned, owned, controlled, monitored, and
understood +, those using the measure C-igure 6.6D.
;igure =/= Measurement 2Cecti(es
Metrics le!ent
=<
To engage indi0iduals in the im/ro0ement /rocess, the, must +e /art of
the de0elo/ment of that /rocess. The, need to understand where the, 2t in
and how the, a1ect the outcome. It does no good to create a metric in a
0acuum, +ring it to the Loor, /ro0ide no de2nition as to what the measure
means, collect the data o1:line, ha0e someone outside the area re/ort on the
metric, and then e"/ect /eo/le to im/ro0e their /erformance.
To o0ercome this tendenc,, it is ad0isa+le to select a handful of desired
outcomes Cthree to 20eD and wor( with the cell team to de0elo/ a//ro/riate
measures for those desired outcomes. *o not clutter an area with the to/ 3;
measures for that o/eration. -irst of all, such /ostings ta(e u/ s/ace and get
in the wa,M second, the, are not as meaningful to those in the cell. -acilitate
agreement among the team a+out common de2nitions, identif, where the
data will come from, select those who will re/ort /rogress, and esta+lish an
e"/ected target /erformance le0el. $e sure to /ro0ide insight as to how
/erformance of the measure can +e im/ro0ed in relationshi/ to the desired
target le0el. It does no good to e"/ect a target le0el that no one (nows how
to achie0e.
$e cogniIant of the fact that the measurement s,stem that is de0elo/ed
+ased on the needs of toda, could change to meet the needs of tomorrow.
Measurements will change +ased on the mar(et, the customer, di1erent le0els
of /erformance, and changing com/etiti0e /riorities. Again referring to
Making
Man"*act"ring Cells $ork
+, Ingersoll .ngineers, change is a constant,
and loc(ing into one /articular measure toda, could render a com/an,
uncom/etiti0e tomorrowB JAn, change in items such as /roduct, deli0er,,
machines, or tooling ma, well cause changes in the need for certain t,/es of
/erformance measures. om/anies mo0e ra/idl, into and out of mar(ets
and otherwise change +usiness strateg, to adFust to e0er:changing com/etiti0e
/ressures, and e"isting /erformance measurements must +e continuall,
re0iewed in res/onse to these changes.K
75
This cha/ter has focused on a short list of metrics that can e1ecti0el,
guide an organiIation on its /ath to sustained continuous im/ro0ement. It
has demonstrated how the sho/ Loor can +e lin(ed to a com/an,Ps o/erational
o+Fecti0es. It has also tried to em/hasiIe the element of measurement
that requires an understanding of human +eha0ior and its im/act on desired
/erformance. The ne"t cha/ter +egins to re0eal where these measures can
wor( as control /oints in monitoring /erformance +etween customers and
su//liers.
=5
5
'ogistics Element
t is now time to address the element re/resenting the greatest o/erational
challenge E Logistics. This is the area in which all the old rules of
o/erating the sho/ Loor are challenged. This is where the turf wars are
fought, functional silos are +rought down, indi0idual (ingdoms are
destro,ed, worlds are dominated, uni0erses are lost X well, ma,+e not quite
that +ig a challenge. &e0ertheless, now that res/onsi+ilit, and accounta+ilit,
ha0e +een dri0en down to a lower le0el within the com/an,, a di1erent set
of rules a//lies and some new techniques will need to +e utiliIed.
This new wa, of doing +usiness in0ol0es changing not onl, the formal
documented /rocess for /lanning and control, +ut also the informal, timetested
sho/Loor rules that ha0e +een ingrained within the organiIationPs
culture o0er the ,ears. Therefore, a lean manufacturing im/lementation is
not onl, changing documented /rocedures and /h,sical material handling
methods, +ut it is also /lacing stress on an informal s,stem that has +een
used for ,ears. This informal s,stem is usuall, more diUcult to com+at.
To a//reciate how strong the informal s,stem within an organiIation can
+e, as( ,ourself how quic(l, and e1ecti0el, rumors /ass through ,our
organiIation.
.nough said. This +eing the case, it +ecomes /ainfull, o+0ious that
the communication /lan Cidenti2ed in ha/ter 5D is of /aramount im/ortance
to the success of an im/lementation. .m/lo,ees need to understand
wh, their informal s,stem is +eing challenged and what this im/ending
change will do to a1ect their wor( /lace.
This term
logistics
can mean se0eral di1erent things to di1erent /eo/le,
so we will clarif, its de2nition here. The term, in this conte"t, refers to those
o/erational elements required to transfer wor( to a cell, through that cell,
and from one cell to the ne"t. It is /rimaril, those in:+ound, internal, and
out:+ound as/ects of /lanning and controlling the Low of wor( that are
I
=>
in0ol0ed in this element. -ollowing is a descri/tion of the sco/e of each of
these as/ects E in:+ound, internal, out:+ound C-igure ;.7DB
7.
8n6bo"n&
includes all acti0ities related to getting raw material, /rocured
items, and other direct or indirect manufacturing items to their
res/ecti0e /laces of consum/tion. -unctions such as /rocurement and
su+contract management and items such as engineering drawings,
/rocess s/eci2cations, and tooling are all associated with in:+ound
logistics.
3.
8nternal
has to do with those items required to facilitate the Low of
wor( through the cell. These items in0ol0e cell team mem+ers Ce.g.,
cell leader, /roduction engineer, sho/ touch la+or, /roduction controlD
and include such /h,sical elements as materials or /urchased
/arts, /roduction tooling, equi/ment, Nan+ans, /riorit, listings, etc.
5.
2"t6bo"n&
relates to those items required to e"it from the su//lier
cell and arri0e at a customer or customer cell. Items such as customer
identi2cation, a negotiated deli0er, quantit,, (it de2nition, su//lierheld
in0entor,, mode of trans/ortation, ownershi/ e"change /oints,
etc. are all areas of focus for this as/ect.
&ow that a general idea of sco/e and +oundar, has +een esta+lished, the
0arious /rinci/les in0ol0ed with the logistics /rocess can +e e"/lored indi0iduall,.
Hur focus in this cha/ter will +e onB
;igure 5/7 'ogistics Scope
Im&rove the &rocesses '!
$hich materials( &urchased
&arts( tooling( engineering
data are &rovided to the cell)
Im&rove the material *o$
of com&onents to( through(
and onto the next cell)
Im&rove the customer+
su&&lier relationshi&s
'et$een the cell and
its customer 'ase)
In3Bound
Items:
J Parts
J 4ra-ings
J "ools
Internal
Mem2ers:
J &ell leader
J Prod/ &ontrol
J perators
ut3Bound
Items:
J Products
J "ransportation
J Information
Logistics le!ent
=6
7. Planning/control function
a. Priorit, /lanning Cforward /lanD
+. a/acit, /lanning Cwor(loadD
c. a/acit, control Cin/ut/out/ut controlD
d. Priorit, control Cdis/atch listD
3. A,$, material handling
5. Ser0ice cells
6. ustomer/su//lier alignment
;. Gust:in:time CGITD Nan+an demand signals
?. ell team wor( /lan
<. Le0el loading
@. Mi":model manufacturing
=. )or(a+le wor(
Planning0&ontrol ;unction
The /lanning/control function e"ercised within a cell can go +, se0eral names
Ce.g., constraint scheduling, release and control, wor(Low managementD and
,et still mean the same in terms of functionalit,. The /lanning/control function
descri+ed here requires that s/eci2c wor( rules +e utiliIed during the
o/eration of a cell. !emem+er that the Logistics element has as much to do
with changes in wor( rules as it does with /h,sical /rocess changes. ."am/les
of some of the standard o/erational wor( rules ma, includeB
A
*o not load the cell equi/ment o0er =4W of demonstrated ca/acit,.
A
*o not release wor( inside a0erage actual lead:time.
A
!elease onl, wor(a+le wor( to the cell.
A
Sequence wor( +, using 2rst:in/2rst:out /rioritiIation.
A
*o not release wor( without an authoriIing Nan+an.
These are o/erational wor( rules that are to +e de0elo/ed, de2ned, and
documented +, the cell team mem+ers. Through the education and training
Crecei0ed 0ia the HrganiIation elementD, the cell team will ha0e a +etter
understanding of the need for new wor( rules, and, +ecause the, ha0e
de0elo/ed
and de2ned those rules, there is greater ownershi/ for them as a team.
These wor( rules are not intended so much to reduce Le"i+ilit, as the, are
to facilitate consistenc,, structure, and continuit, among team mem+ers for
o/erations of the cell. This colla+orati0e a//roach to wor( rules in actualit,
will enhance +oth the res/onsi0eness and /redicta+ilit, of cell /erformance,
es/eciall, within a multi:shift en0ironment.
=?
Planning and control are critical functions that contri+ute to the successful
im/lementation of the cell. Hften times, those indi0iduals onl, focusing
on utiliIing Fust:in:time CGITD and Nan+an material /ull o0erloo( these functions.
The initial im/lementation and su+sequent da,:to:da, o/erations of
a cell are greatl, inLuenced +,B C7D how e"ecuta+le the /lan is, and C3D how
ro+ust the control mechanism is. There e"ists a strong relationshi/ +etween
these functions, as the +etter the /lanning e1ort, the easier the control e1ort.
The criticalit, of this relationshi/ was em/hasiIed +, the Ga/anese master of
/roduction engineering, Shingo Shigeo C
/on6Stock Pro&"ction+ The Shingo
Syste! *or Contin"o"s 8!)rove!ent
DB JIf the /lanning le0el is a+out @4 /ercent,
control /recision need onl, +e around 34 /ercent. If the /lanning le0el
is a+out ;4 /ercent, control /recision needs to +e around ;4 /ercent.K
34
There
are four +asic as/ects to /lanning/control within a cell C-igure ;.3D, and each
is e"/lained in detail in the following discussion.
Priorit! Planning ,-or$ard Plan.
This as/ect is concerned with /lanned or future wor(load requirements,
which are normall, fed to the cell +, a manufacturing resource /lanning
CM!P IID or some other requirements /lanning s,stem. Lean manufacturing
in no wa, a+olishes the need for requirements /lanningM rather, it actuall,
requires it in order toB C7D esta+lish cell design criteria, C3D /lan short:term
wor(loads C7 to 6 wee(sD, C5D /erform ma(e/+u, anal,ses, and C6D communicate
future demand needs to u/stream su//liers. A com/an,Ps current
requirements /lanning s,stem is usuall, adequate enough to /ro0ide the
required information for a lean manufacturing en0ironment.
;igure 5/: Aspects of Planning and &ontrol
Logistics le!ent
=@
Ca&acit! Planning ,orkload.
This function is necessar, for the cell team to re0iew and agree u/on the
u/coming wor(load, man/ower, and o0ertime requirements necessar, to
satisf, customer /erformance e"/ectations. This ca/a+ilit, allows the cell
team to determine its own destin, and /ro0ide in/ut into the decision /rocess
that controls end /roduct /erformance. The cell le0el 0isi+ilit, to future
wor(load Luctuations can then +e mitigated +, the cell team through le0el
loading, o1:loading, lot siIe s/litting, /lanned o0ertime, etc.
Ca&acit! Control ,In&ut+Out&ut Control.
The cell team is held accounta+le to manage /erformance to /lan. a/acit,
control is used as a control de0ice to /ro0ide the cell team with the ca/a+ilit,
to maintain wor(load 0isi+ilit, and monitor /rogress to /lan. The, are gi0en
the o//ortunit, to ta(e credit for achie0ing an o/erational goal or are /ro0ided
with the a+ilit, to ta(e swift correcti0e action when /erformance is
falling o1 the mar(. Managing queue siIes is /aramount to meeting leadtime
commitments. If actual queues are e"ceeding /lan, then /romise dates
to customers will +e missed and customer con2dence will diminish. Leadtime
0aria+ilit, Ca true menace to man, deli0er, /ro+lemsD is a direct reLection
of how well actual queue times are (e/t in control.
Priorit! Control ,/is&atch 0ist.
The sequence +, which wor( is introduced to the cell will +e a function of
three thingsB C7D Is there a customer demandR .0en though there is a /lanned
requirement for an item, until there is a demand /ull signal from the customer,
there is no real need for the item. C3D Is there enough ca/acit,R Until
ca/acit, has +een cleared or a Nan+an container +ecomes a0aila+le to introduce
more wor( into the cell, it cannot release wor(. If wor( was released,
wor( in /rocess would increase +e,ond the cell design /arameters, queues
would grow, and lead:time would increase. C5D Is the wor( /ac(age a0aila+leR
Unless all the items necessar, to wor( a Fo+ ha0e +een made a0aila+le, wor(
cannot +e released to the cell. If incom/lete wor( /ac(ages were released to
the cell, the, would e0entuall, sto/. The, then would ha0e to wait for
resources to +e a//lied to +rea( it loose, and the wor(Low would +egin to
+ac(log.
5A
A#B#& Material ,andling
In a lean en0ironment, controlling the Low of material and managing in0entor,
will change under the new o/erating rules for material handling. Instead of
managing each and e0er, /art e"actl, the same wa,, /arts will +e reclassi2ed
+ased on their demand +eha0ior characteristics. -or instance, a large, com/le"
machined /art weighing ;44 /ounds with 744 hours of machine time would
+e scheduled and controlled di1erentl, than a nic(el/dime cli/ or +rac(et. The
amount of time, mone,, and resources required to manage in0entor, should
+e com/ara+le to the +eha0ior characteristics of the /art or com/onents. Parts
should +e strati2ed according to a gi0en criteria so that an a//ro/riate amount
of e1ort is e"/ended on managing the /art re/lenishment /rocess.
Parts or com/onents can +e segregated along an A,$, t,/e of classi2cation
C-igure ;.5D. This a//roach di1ers slightl, from ParetoPs @4/34 ruleM
howe0er, the a0erage /art /o/ulation still falls along the normal 7;/5;/;4
/ercentage s/lit. -or e"am/le, /arts that are e"/ensi0e, more com/le" to
+uild, and often e"hi+it long lead:times should +e considered JAK /arts. The,
should +e scheduled with su//liers either C7D with trans/ortation /i/eline
Nan+ans Ces/eciall, with high:0olume /roductD, or C3D directl, through M!P
II Cfor low:0olume /roductD, Fust as in most /lants toda,. J$K /arts are usuall,
less com/le", ha0e shorter and more /redicta+le lead:times, are less e"/ensi0e,
and are small enough to +e (itted Cif requiredD. These can +e re/lenished
0ia Nan+ans and can /ossi+l, +e +uilt on demand. These /arts could +e +uilt
;igure 5/< A#B#& Material ,andling
Logistics le!ent
57
and deli0ered in negotiated +atch siIes or in /redetermined (its Cif requiredD.
If the demand 0olume is low or highl, 0aria+le, it ma, ma(e more sense to
re/lenish these /arts 0ia M!P II or through nonre/etiti0e Nan+ans. $, far
the maForit, of /arts C;4WD would 2nd themsel0es in the JK categor, and
could +e managed directl, through a 0endor:managed reorder /oint or Nan+an
s,stem. These /arts would a//ear on the +ill of material, +ut would not
+e scheduled /er M!P II and therefore would require minimal man/ower
to manage.
Ser(ice &ells
In an ideal world, all /arts would +e manufactured com/lete within a gi0en
cell. All the necessar, manufacturing /rocesses would +e located in that cell
and the /arts would ne0er ha0e to lea0e the cell. !aw material would come
in and a com/letel, 2nished /art Cread, for consum/tion +, the customerD
would go out the other side. &ow, if ,ou currentl, ha0e this scenario o/erating
within ,our /lant, then /ass +, this section +ecause it does not a//l,
to ,ou. Howe0er, if ,ou are li(e the maForit, of the manufacturing communit,,
,ou certainl, do not ha0e enough ca/ital to full, /o/ulate ,our cells in
this manner. This section will /ro0ide an o/tion for ,our facilit,.
Ha0e ,ou e0er +een to a dr,cleaner with a load of shirts and read the sign
out front, JIn +, =, out +, ;RK Ha0e ,ou e0er +een to a train station and
ridden on a trainR *id ,ou notice how the conductor continuall, chec(s his
watch and monitors the time in the stationR He is ma(ing sure the train
enters and lea0es the station on time. At @B44 a.m., for e"am/le, announcing
Jall a+oardK indicates that the train is lea0ing the station. An,one there can
+oard, and those who are not there will ha0e to wait until the ne"t scheduled
train arri0es. )hat if certain ca/ital:intensi0e manufacturing o/erations were
set u/ to run in the same mannerR The a+o0e:mentioned scenarios descri+e
two t,/es of rules that can a//l, with ser0ice cells C-igure ;.6D. These ser0ice
areas are designed to su//ort cells that are manufacturing /roducts. Their
o+Fecti0e is to satisf, the needs of the manufacturing cells and to /ro0ide a
/redetermined le0el of ser0ice or turnaround for a /articular /rocess.
$ecause, as we learned earlier, manufacturing cells are accounta+le for the
/roduct from cradle to gra0e, the, +ecome highl, de/endent on ser0ice cells
to /ro0ide consistent, /redicta+le /rocess turnaround. This le0el of de/endenc,
strengthens the customer/su//lier relationshi/ and ties in directl, with
the Metrics element that we e"/lored in ha/ter 6.
5:
&ustomer0Supplier Alignment
)hen com/anies /a, homage to the terms
c"sto!ers
and
s"))liers
, it is
normall, the t,/e of Jmotherhood and a//le /ieK li/ ser0ice that does not
mean much in the wa, of su+stance. In order for lean manufacturing to trul,
function, direct lines of communication +etween customers and su//liers
must +e identi2ed and strengthened. -or e0er, /roduct /roduced within a
manufacturing cell, there is a corres/onding customer or customer cell that
will +e consuming that /roduct. )hether the su//lier cell is /art of an
internal customer/su//lier relationshi/ within a multi:/lant facilit, or /art
of a larger su//l, chain in0ol0ing se0eral di1erent com/anies, the same adage
a//liesB alignment with the customer. ell mem+ers should recogniIe who
utiliIes their /arts and (now if those /arts are satisf,ing the customerPs 2t,
form, and function requirements. Are the, /ac(aged correctl,R Is there a
+etter (itting /rocedure that could +e utiliIedR an we negotiate a +etter
deli0er, quantit, to hel/ our total /roduct costR )ho do the, call when there
is a qualit, /ro+lem with the last /arts that were recei0edR These are all
legitimate questions that can +e as(ed and answered when there is direct
alignment +etween customers and su//liers.
Hne wa, to +egin esta+lishing this alignment relationshi/ is toB
7. !un a Jwhere used/recei0ed fromK list o1 the +ill of material for all
/arts/com/onents that are assigned to a gi0en cell.
3. Sort the /arts +, four categoriesB customer, 0olume, cost, and destination,
which allows /rioritiIing in0estigati0e e1orts.
5. all on the +iggest customers or su//liers 2rst to assess their needs
and +egin negotiating wa,s of im/ro0ing the su//l, chain.
;igure 5/= Ser(ice &ell Relations$ip
Logistics le!ent
5<
In addition to ca/turing the /art num+ers, a /rocess ma/ of the acti0ities
for the cell can +e 0er, useful. $, utiliIing a format of su//lier:in/ut:
/rocessout/ut:
customer CSIPHD, a great deal of information can +e o+tained in
regard to in/ut requirements for the /rocess and out/ut requirements of the
customer. $, ca/turing the (e, acti0ities within a /rocess Ce.g., a cell, su//lier
interface, shi//ing, order administrationD and categoriIing them according
to 0alue:adding or non:0alue:adding, signi2cant insight into the /erformance
of a /rocess can +e o+tained. !emem+er that this is documenting
acti0ities, not tas(s. Nee/ing the /rocess ma/ at the a//ro/riate le0el of detail
can +e diUcult. Acti0ities are focused on the 0er+:noun Caction to an o+FectD
relationshi/ of functions in a /rocess, while tas(s are more the /roceduralle0el
ste/s for those acti0ities. To (ee/ this distinction straight, tr, using the
guidelines set +, ol(ins in his
Activity6Base& Cost Manage!ent+ Making 8t
$ork+ A Manager7s G"i&e to 8!)le!enting an& S"staining an 9ective ABC
Syste!
B JA good rule is to thin( of acti0ities as what /eo/le do and the tas(s
that ma(e u/ acti0ities as how the /eo/le /erform acti0ities.K
3
Must3in3"ime FMI"G Ban2an 4emand Signals
A multitude of methods can +e e"ercised when utiliIing /ull signals C-igure
;.;D. The, include cards, standard containers, em/t, squares on the sho/
Loor, electronic messages Ce.g., fa"es, e:mails, .*I, e:commerceD, among
;igure 5/5 Must3in3"ime FMI"G 4emand Pull Signals
5=
others. All of these methods ha0e se0eral as/ects in common. -irst, the
demand signal re/resents the authoriIation to +egin wor(. Second, no Fo+ is
to +e released for wor( without a demand authoriIation from the customer.
Third, the demand signal controls the amount of wor( in /rocess allowed in
the su//l, chain. -ourth, the num+er of Nan+ans in the s,stem will determine
the amount of wor( in /rocess for the chain. This scenario gi0es the cell the
a+ilit, to control 0aria+ilit, in lead:times, as queues are una+le to grow
+e,ond the num+er of calculated Nan+ans. -ifth, no one is allowed to (nowingl,
/ass defects on to the ne"t o/erationM defects are to +e sto//ed when
the, are found and correcti0e action incor/orated immediatel,. Si"th, wor(Low
is /rioritiIed on a 2rst:in/2rst:out C-I-HD +asis. This not onl, a//lies
to the scheduling of wor( into the cell, +ut also the /h,sical handling of
material. The /h,sical in0entor, turno0er of material is Fust as im/ortant as
the 2nancial in0entor, turno0er of material. These as/ects of managing Nan+ans
are summariIed in the following rulesB
7. A Nan+an demand signal is the authoriIation to +egin wor(.
3. &o Fo+ is to +e released without demand from the customer.
5. The Nan+an controls the amount of wor( in /rocess allowed in the
Low.
6. The num+er of Nan+ans will control the manufacturing lead:time
through queue management.
;. *o not /ass (nown defects on.
?. UtiliIe 2rst:in/2rst:out C-I-HD material Low.
Nan+ans can +e set u/ +etween wor(stations, +etween wor(stations and
/oint:of:use CPHUD locations, +etween cells and central stores, +etween
assem+l, cells and fa+rication cells, +etween fa+rication cells and e"ternal
su//liers, and +etween assem+l, cells and customers. .ach relationshi/ will
ha0e its own indi0idual issues to address as to location, siIe, quantit,,
ownershi/,
shelf life, weight, etc. -or the /ur/oses of general discussion in this
section on methodolog,, there will +e two t,/es of Nan+an material /ulls,
one de/icted as intra:cell Cinternal to the cellD and one as inter:cell Ce"ternal
to the cellD. .ach has a relationshi/ with /roduction cells and the o0erall
o+Fecti0e for Nan+an demand signals.
The t,/e of Nan+an methodolog, de/lo,ed is 0er, de/endent on the
manufacturing
en0ironment, the rece/ti0it, to change of an organiIationPs culture,
and a su//lier/customerPs moti0ation for /artici/ation. The more diUcult the
en0ironment, the more ro+ust a /rocess required. &o one (nows the
manufacturing
en0ironment +etter than each indi0idual com/an,M therefore, each
Logistics le!ent
55
com/an, is in the +est /osition to determine which method to use. Howe0er,
no matter what method is chosen, the si" rules for managing Nan+ans still
a//l,.
&ell "eam *ork Plans
As was mentioned in ha/ter 5, a lean manufacturing cell o/erates as a team
com/letel, focused on deli0ering a /roduct to a customer. -or this team to
function as one cohesi0e unit, the, must agree on how the, will o/erate.
.arlier, in the /lanning/control section, the idea of a forward /lan was introduced.
This /lan /ro0ides a future loo( at the /roduction requirements
coming to the cell o0er the wee(. The cell team re0iews this forward /lan,
ensures that the, ha0e enough ca/acit, and resources to ma(e this /lan Cif
not, the, will ma(e the /ro/er adFustmentsD, and agree, as a grou/, to e"ecute
this /lan. This wa, there is +u,:in to the schedule +, all the team mem+ers.
The, own the /erformance o+Fecti0es for the ne"t wee( and the, ha0e
de0elo/ed
s,nerg, around the /lan.
This re0iew /rocess should ta(e /lace on a regular +asis Ce.g., wee(l,D and
+ecome /art of the routine management of the cell. The cell leader should
antici/ate facilitating this discussion, and the su//ort /ersonnel should /lan
on /erforming an anal,sis on the data +efore /resenting it at the meeting.
The meeting can then mo0e along eUcientl, and with little wasted e1ort.
This ma, a//ear to +e a sim/le, common:sense acti0it,, +ut it is sur/rising
how man, cell im/lementations ne0er utiliIe this acti0it, and later wonder
wh, the cell teams are not achie0ing the targeted o+Fecti0es and are Loundering
without a common focus.
'e(el 'oading
According to one of the leading authorities on su//l, chain management,
)illiam . o/acino, in his +oo(
S"))ly Chain Manage!ent+ The Basics an&
Beyon&
, there are four /rerequisites or /illars required for a GIT s,stem to
function /ro/erl,B JIf GIT logistics /lans are to wor(, four /illars must +e in
/lace X sta+le /roduction schedules, eUcient communication, coordinated
trans/ortation, qualit, control.K
6
It is one of these /rerequisites E a relati0el,
le0el /roduction schedule o0er a de2ned /eriod of time E that is the su+Fect
of this section. In order to align customer demand with ta(t time Csee ha/ter
?D, a need e"ists to le0el demand at a rate that is conduci0e for +oth the
su//lier and the customer.
5>
$, /resenting the customer:forecast information in units /er da, or wee(,
an understanding as to the demand /attern and 0olume 0ariation for a gi0en
set of /roducts can +e anal,Ied. This information /ro0ides insight into the
de0elo/ment of a le0el rate:+ased schedule for a /roduction cell. This le0el
rate:+ased schedule of demand o0er a gi0en /eriod of time is onl, for /roducts
that 2t a rate:+ased demand /attern which demonstrates a relati0el,
high 0olume of demand, a consistent customer order frequenc,, and limited
0olume Luctuation. $, utiliIing a rate:+ased schedule C-igure ;.?D, these
/roducts are scheduled less often Ce.g., once a monthD and are designed to
+e /roduced at a gi0en rate for a gi0en /eriod of time. !ealiIing that demand
does change, customer demand /atterns should +e monitored on a regular
+asis and the scheduled rate adFusted accordingl,.
To de0elo/ a rate:+ased schedule, ta(e the forecast information in units
+, da, or wee( and com/ute a monthl, a0erage. Then, com/are the forecast
monthl, a0erage to the +oo(ed orders and de0elo/ a rate of /roduction from
the higher of the two num+ers. This is done in order to +u1er against 0ariation
in customer demand. This methodolog, is similar to the total demand /rocess
tal(ed a+out +, ostanIa in
The :"ant"! Lea)+ 8n S)ee& to Market+
JThe
de2nition of total demand inside the *emand time fence is the sum of actual
customer and 2nished goods re/lenishment orders. Total demand outside the
*emand time fence is the greater of the forecast and actual customer orders.K
;
-rom this /oint, the /roduction cells can commit to a /roduction schedule
on a wee(l, +asis and +e held accounta+le for achie0ing their /lanned
out/ut. As was stated earlier, not e0er, /roduct has a demand /attern conduci0e
to rate:+ased scheduling, +ut for those that do, this can +e a 0er,
e1ecti0e methodolog,.
;igure 5/> Rate3Based Sc$edule
Logistics le!ent
56
Mix3Model Manufacturing
There are manufacturing cells with wor(stations that can +e designed to
/roduce a 0ariet, of /roducts and 0olumes o0er a gi0en time frame. These
cells are ca/a+le of /erforming what is (nown as mi":model manufacturing
C-igure ;.<D. The criteria for designing these t,/es of cells requires that the
/roduction /rocesses +e relati0el, consistent from /art to /art without a
signi2cant amount of 0ariation in the /rocess. In addition, these cells usuall,
contain a highl, Le"i+le wor(force, ha0e limited 0ariation +etween wor(
content times for each o/eration, and can change o0er +etween /roducts 0er,
ra/idl,.
Mi":model manufacturing /ro0ides the ultimate res/onsi0eness and utiliIation
of Loor s/ace. It su//orts ma(ing an, mi" of an, /roduct on an,
da, C/ro0ided the /roducts were designed for the cellD. Again, Schon+erger,
in his +oo(
;a)anese Man"*act"ring Techni-"es+ /ine Lessons in Si!)licity
,
descri+ed the /ositi0e e1ects of mi":model manufacturingB JAn ad0antage
of mi":model sequencing is that each da, ,ou ma(e close to the same mi"
of /roducts that ,ou sell that da,. This a0oids the usual c,cle of a large +uildu/
of in0entor, of a gi0en model, followed +, the de/letion to the /oint of
/otential lost sales as the ne"t model +uilds u/.K
7;
;igure 5/6 Mix3Model Manufacturing
5?
Hnce those manufacturing /rocesses that 2t the a+o0e:mentioned criteria
are grou/ed together in a cell, it is Fust a matter of understanding the /roduct
demand +eha0ior and segregating the mi" +ased on that +eha0ior. !ate:+ased
/roducts are made in the same amount e0er, da,. Nan+an re/lenishment
/roducts Coften 2nished:goods stoc(D are re/lenishments for Nan+ans as
demand requires. The ma(e:to:order or s/ecial /roducts will +e made when
there is enough ca/acit, remaining to /roduce those /roducts. $, scheduling
/roduct this wa,, one ma(es the most e1ecti0e use of s/ace, equi/ment,
/eo/le, time, material, etc. The conce/ts of runner, re/eater, and stranger,
which are a//lica+le to this methodolog,, will +e discussed in greater detail
in ha/ter ?.
*orka2le *ork
$orkable work
is a term that refers to those elements contained within the
manufacturing /rocess that are necessar, in order for wor( to +egin on a
/roduct C-igure ;.@D. .0er, manufacturing en0ironment will ha0e something
that is s/eci2call, required in order to +egin wor(M howe0er, all en0ironments
will ha0e the following elements in commonB C7D material, C3D tooling, C5D
;igure 5/? *orka2le *ork
Logistics le!ent
5@
wor( instructions, C6D demand, and C;D s(illed wor(ers. Most M!P II s,stems
are set u/ to /lan and release wor( to the sho/ Loor +ased on demand
information generated from the s,stem. Some ha0e a logic setu/ to chec( for
com/onent /art a0aila+ilit, +efore assem+l, orders are launched, +ut that is
normall, where it sto/s.
The /ro+lem that arises in man, /lants is that wor( is released to the
sho/ Loor without ha0ing 0eri2ed com/letel, that it is wor(a+le. -or e"am/le,
wor( order IS7356 is launched to the 2rst o/eration. The /art is +lan(ed
and mo0es on through o/erations two through 20eM howe0er, when it arri0es
at o/eration si", there is an issue. The tooling is out for re/air and not
a0aila+le to run this Fo+. )hat ha//ensR The Fo+ sits and waits until the
tooling is a0aila+le. This ha//ens e0er, da, in /lants, and the more com/le"
the manufacturing o/eration the more this launch:and:wait +eha0ior is e0ident.
Instilling an awareness of the conce/t of wor(a+le wor( sets in motion
a /rocess that 0eri2es the a0aila+ilit, of those critical elements required +,
manufacturing, +efore committing a Fo+ to the sho/ Loor, there+, eliminating
the dela,s and wait time that are so indicati0e of long manufacturing
lead:times.
The to/ic of logistics is a 0er, +road su+Fect matter that could easil, 2ll
an entire te"t+oo(. This cha/ter was onl, intended to co0er some of the
/rimar, as/ects that should +e addressed as /art of a lean manufacturing
im/lementation. &ow that we ha0e a greater a//reciation for the infrastructure
elements, it is time to address the element that is most familiar to /eo/le
E Manufacturing -low.
>7
>
Manufacturing
;lo- Element
ost /ractitioners within the 2eld of manufacturing can relate to
tangi+le, hard:fact t,/es of /roFects that indi0iduals can go and la,
their hands u/on, so to s/ea(. These are the t,/e of im/ro0ement
initiati0es most readil, em+raced and im/lemented. These /roFects are the
most 0isi+le, and the, are witnessed +, e0er,one within the organiIation.
This is wh, the idea of rearranging equi/ment and altering sho/Loor la,outs
is /ursued so /assionatel, +, man, manufacturing organiIations. Im/ro0ements
are easil, recogniIa+le, and it is o+0ious that change has ta(en /lace.
In order to win this /articular crowdPs acce/tance for a holistic a//roach to
lean manufacturing, hard:fact results must +e e0ident. This +eing the case,
this cha/ter /resents a series of cell design techniques +ased on hard:fact
material which should +e utiliIed when de/lo,ing a lean manufacturing
conce/t similar to the one descri+ed in this +oo(.
The following series of techniques is to +e used when assessing /roducts
and their associated /rocess Low and translating that data into usa+le
information
for generating a cell designB
7. Product/quantit, CP/SD anal,sis C/roduct grou/ingD
3. Process ma//ing
5. !outing anal,sis C/rocess, wor( content, 0olume matricesD
6. Ta(t time
;. )or(load +alancing and one:/iece Low
?. ell design guidelines
<. ell la,out
@. Nan+an siIing
M
>:
Product0Nuantity Analysis FProduct GroupingG
The 2rst ste/ in this /rocess is to gather and understand /roduct demand data
C-igure ?.7D. This is accom/lished +, generating a cumulati0e Pareto /ercentage,
+, 0olume, of all /roduct stoc((ee/ing units CSNUsD. These data items
originate at the customer and /ro0ide a +aseline +, which to +egin demand
+eha0ior anal,sis. AnnualiIed /roduct SNU demand data should +e segregated
on a monthl,/wee(l,/dail, demand +asis. The source of this information usuall,
comes from the +usiness /lan forecast Cin unitsD and co0ers a time horiIon
of ? to 73 months. $, dis/la,ing the cumulati0e /ercentage, +oth high: and
low:0olume /roducts +egin to /resent themsel0es. In addition to the forecast
data, it is im/ortant to consider the actual customer order sales data. *oing
so accounts for actual demand 0olume and mi" 0ariation, which is im/ortant
in/ut for the ta(t time calculation Cdiscussed later in this cha/terD.
The P/S anal,sis C-igure ?.3D loo(s for natural +rea(s in /roduct grou/ings
+, sorting the gathered data and determining a 2t for /roduction cells
+,B C7D their associated 0olumes, and C3D /roduct alignment characteristics.
This is usuall, an iterati0e /rocess and is conducted se0eral times in order
to determine a +est 2t for each cell t,/e. Product alignment characteristics
could include the following criteriaB
7. Align high:0olume /roducts together.
3. Align to s/eci2c customers, such as original equi/ment manufacturers
CH.MsD.
5. Align to s/eci2c target mar(ets.
6. Align to common manufacturing /rocesses.
;. Align to con2guration commonalit, CsiIe, material, function, etc.D.
?. Align to engineering content Cstandard 0s. s/ecialD.
;igure >/7 Product 4emand
/*a,
><
After the /roducts ha0e +een identi2ed and segregated into /roduct
grou/ings, the, are sorted +, 0olume and /lotted on a chart. This chart
0isuall, dis/la,s the natural +rea(s in 0olume +, grou/. &ormall,, 64W of
the /roducts will account for ?4W of the /art 0olume Cthis is referred to as
the 64/?4 ruleD. )hen a /roduct grou/ing falls into this categor,, it is wise
to esta+lish dedicated Low lines/cells with segregated resources in su//ort of
this /roduct grou/ing. These /roducts are called
r"nner
/roducts +ecause
the, ha0e high 0olumes, frequent customer orders, and sta+le demand C-igure
?.5D. The remaining +alance of /roduct grou/ings will fall into one of
two categories. The 2rst grou/ 2ts a general /ur/ose or Le"i+le cellular
o/eration (nown as
re)eaters
. This categor, has a greater 0ariet, of /roducts,
which will +e /roduced across resources that are not dedicated to a s/eci2c
Low line. Parts that ha0e lower 0olume amounts, 0aria+le order frequenc,,
and/or high 0aria+ilit, in o/erational routings will 2nd their wa, into this
categor,. The second categor, is that of
strangers
. This categor, is for miscellaneous
items that are +eing /roduced within the /lant as one:o1 items
or that ha0e a 0er, low 0olume or infrequent Conce /er ,earD demand /attern.
These items are usuall, +est managed through M!P II and can +e segregated
from the rest of the factor, +,B
7. .sta+lishing se/arate /roduction area
3. !unning the /roducts once or twice /er month
5. !unning them when ca/acit, is a0aila+le
6. Hutsourcing the /roducts
;igure >/: P0N Analysis
>=
;. !unning them once /er ,ear and holding in 2nished:goods stoc(
?. Ma(ing one 2nal run and eliminating the item from current /roduct
o1ering
Hill, in his
, addresses this same idea
of segregating /roducts, onl, his focus is on the mar(et /laceB Jom/anies
need to recogniIe that low:, medium:, and high:0olume +atch /rocesses handle
a 0er, wide range of 0olumes with corres/ondingl, di1erent order:winners.
-or com/anies, therefore, to assume that the choice of one /rocess, e0en for
a single categor, such as +atch, will /ro0ide su//ort for the le0el of di0ersit,
associated with a normal range or /roducts/ser0ices is a mista(e.K
74
In either
case, whether +, /roduct alignment criteria or order winners, it is im/ortant
to recogniIe that all /roducts are not demanded the same and therefore should
not +e managed the same.
Process Mapping
Hnce the /roduct demand +eha0ior is understood, the ne"t area of anal,sis
is that of /rocess ma//ing. It is necessar, to (now what o/erations are
required to /roduce the /roducts +eing considered for cell design. In the end,
the 2nal design of the cell will need to account and accommodate for all
/rocess ste/s, whether accom/lished in the cell or not. $loc( /rocess ma//ing
C-igure ?.6D is usuall, conducted on the highest 0olume /roducts. The lower
;igure >/< Runner# Repeater# Stranger
Ad(antages:
Responsi(e lead3time
'o- unit cost
,ig$ e%uipment utili!ation
4isad(antage:
InIexi2le to (ariety
Ad(antage:
;lexi2le to (ariety
4isad(antages:
.nresponsi(e to lead3time
,ig$ unit cost
'o- e%uipment utili!ation
>5
0olume /roducts can +e ma//ed se/aratel, if the /rocess ste/s are signi2cantl,
di1erentM howe0er, this is usuall, not the case. $, actuall, wal(ing the
/rocess, documenting the ste/s, and tal(ing with the /rocess owners, a good
re/resentation of the /roduct Low and 0olume can +e documented.
In addition, to the +loc( /rocess ma/, a s/aghetti diagram C-igure ?.;D
is created in order to gras/ the magnitude of o/erator and material tra0el in
the current /rocess. The reason it is called a s/aghetti diagram is that +, the
;igure >/= Block Process Mapping
;igure >/5 Spag$etti 4iagram
Ra- materials
incoming
Slotting
operation
Bore
operation
"rigger assy/
operation
Greasing
operation
;inal assy/
operation
;inis$ed goods
outgoing
Spin test
operation
,eat3treat
operation
Manufacturing cell
>>
end of the e"ercise of recording the current /rocess the drawing loo(s li(e a
+owl full of s/aghetti. This sim/le technique is nothing more than drawing
the area under assessment, re/resenting the o/erator and material mo0ement
on /a/er with a colored mar(er, and measuring the amount of feet tra0eled
for +oth. )hat we can learn from this technique is 0er, illuminating. It is
not uncommon for an o/erator to +e tra0eling u/ to half a mile e0er, time
there is a need to gather tools and /arts to conduct a machine changeo0er.
These two tools are used as sources of in/ut during the cell design /rocess.
The, do a good Fo+ of ca/turing the Jas isK condition and 0isuall, dis/la,ing
what is actuall, ha//ening in the /rocess toda,. The, identif, signi2cant
o//ortunities for waste elimination or reduction and /ro0ide real data +,
which to ma(e decisions, rather than rel,ing u/on JI thin(XK or JI feelX .K
Routing Analysis FProcess# *ork
&ontent# +olume MatricesG
!outing anal,sis is nothing more than the assessment of wor(Low /atterns
and 0olume//rocess 0ariation. The 2rst ste/ in this anal,sis is the creation
of a /rocess matri" C-igure ?.?D. This is accom/lished +, /lacing the routings
for each /art of a /roduct on a grid. $, identif,ing all manufacturing /rocesses
across the to/ and listing /roducts down the side, a grid is created
where each /art routing can +e /h,sicall, drawn. $, dis/la,ing the wor(Low
in this manner, it is eas, to see /atterns of commonalit,, resource consum/tion,
and re0erse /art Low acti0it,. .ach of these items is an im/ortant factor
to consider when esta+lishing cell con2guration.
The /ur/ose of a wor( content matri" C-igure ?.<D is to gather rele0ant
man time, machine time, and setu/ time for a /articular /art /o/ulation. After
+eing collected, this +aseline information should +e loaded into a data+ase as
;igure >/> Process Matrix
>6
reference data for utiliIation during the cell design /rocess. This data+ase of
information can +e gathered in one of at least two di1erent wa,s. The 2rst is
strictl, a manual /rocess in which an industrial engineer will conduct a wor(
element anal,sis and com/lete a time o+ser0ation form CTH-M -igure ?.@D. The
;igure >/6 *ork &ontent Matrix
;igure >/? "ime 2ser(ation ;orm
>?
engineer will wal( the /rocess ma/ for each /art and record the actual
o/erational
data for each of the /rocess ste/s. The engineer will need to (ee/ trac(
of +oth the indi0idual o/eration time and the cumulati0e running total time.
*e/ending on the o/eration, a series of 20e to ten recordings should +e enough
to accuratel, reLect the /rocess. In addition to the time stud,, inter0iews with
the /rocess owners can /ro0ide 0alua+le insight into the e"isting /rocess Low.
At times, with certain wor( en0ironments, these Jtime studiesK can +e
0iewed in a negati0e light, and /artici/ation +, the sho/ Loor can +e diUcult
to o+tain. It should +e e"/lained that these o+ser0ations are +eing used to
tr, to understand the current /rocess and are not +eing used to set /a, rate.
If there is still o//osition, then tr, to reach a consensus utiliIing the e"isting
wor( element standards. In man, cases, there is so much im/ro0ement
o//ortunit, a0aila+le without +eing concerned with changes to the actual
wor( content of the /rocess that this is not an issue.
A second a//roach would +e to ca/ture data from the e"isting M!P II
s,stem. This a//roach is /ro+a+l, more acce/ta+le when tr,ing to address a
large /o/ulation of /arts in a short /eriod of time and information accurac,
of =;W is not required. If, howe0er, the root cause of a /ro+lem is critical or
an accurate stor, is required, then it is recommended that the anal,sis +e
/erformed on data collected directl, from the sho/ Loor. This wa, the engineer
can not onl, formall, record what is seen +ut also record informall,
what is heard through con0ersations with sho/Loor /ersonnel.
At this /oint, the wor( content of the /roducts has +een recorded and
some insight into the /roduct /rocess Low has +een documented. &ow it is
time to understand the relationshi/ +etween the two. $, reLecting the /roduct
and /rocess Low in a 0olume matri" C-igure ?.=D, decisions a+out the
cell design +egin to e0ol0e. The 0olume matri" reLects demand and /rocess
Low data in /roduction units and minutes/hours. The /lacement of /roduct
grou/s on a matri" allows for the calculation of total 0olume +, units and
hours for each /roduct and each /rocess. *e/ending on the manufacturing
/rocess, the /roduction rate could +e calculated in da,s or wee(s. The hours
should reLect three maFor categoriesB man time, machine time, and setu/
time Cthe setu/ time +eing assumed at once /er da,D. Hne of the o+Fecti0es
of a lean manufacturer is to +e Le"i+le and res/onsi0eM therefore, the goal is
to ma(e toda, what is sold toda,. This cannot +e accom/lished if changeo0ers
are e"ecuted once /er month.
Again referring to ostanIaPs
The :"ant"! Lea)+ 8n S)ee& to Market,
the
author descri+es a similar /rocess of searching for commonalit,B J.ach /roduct
is re0iewed to identif, the /articular /rocesses or machine o/erations
required to manufacture each /roduct. The ne"t ste/ in cell design is to create
>@
a cell con2guration that is made u/ of the common machines or o/erations
identi2ed in the /rocess ma/.K
;
There are two /rimar, outcomes of the routing anal,sis e"erciseB C7D the
segregation of high: and low:0olume /roducts +ased on a reLecti0e 0iew of
the manufacturing /rocess, and C3D an understanding of the degree of 0ariation
in /roduct 0olume/mi" and wor( content as it relates to cell design. It
is through an understanding of these two as/ects that cell design decisions
can +e made relati0e to the use ofB
7. Scheduling methodolog, E com/le" mi" 0s. segregated /roduction
3. !ate:+ased, Nan+an, ma(e:to:order /roducts
5. Nan+an +u1ers for line im+alances and long setu/ times
6. .qui/ment wor(loads
;. .qui/ment needs
?. StaUng needs
<. Shift hour requirements
"akt "ime
The word
takt
comes from the 9erman word for rh,thm or +eat. Ta(t time is
the +asis for cell design and re/resents the rate of consum/tion +, the
mar(et/lace
C-igure ?.74D. Ta(t time is where the e1ort starts, +ecause it is reLecti0e
of the customer demand. .0er,thing in cell design is +ased on ta(t time. Ta(t
time is often confused with c,cle time. The two are calculated from com/letel,
di1erent /ers/ecti0es. ,cle time re/resents the current ca/acit,/ca/a+ilit, of
the e"isting o/eration, whereas ta(t time is +ased on /roFected customer
demand, not the a+ilit, of the current /rocess to /erform. The ratio for ta(t
time has scheduled /roduction time a0aila+le as the numerator and designed
;igure >/@ +olume Matrix
Product
SNU C#ol.D
H56=?< C57D
-56<@? C3@D
H56=@< C35D
U@=<;? C74D
S/U M S/U M& S/U S/U M& M S/U
57.4
<4.4
35.4
;.4
73=
57.4
<4.4
35.4
3;.4
76=
3;.4
34.4
34.4
3;.4
=4
=;.3
=;.3
=;.3
=;.3
7;.4
7;.4
6?.;
76.4
77.;
<.4
<=
6?.;
76.4
56.;
7;.4
774
7;.4
5;.4
34.4
7;.4
@;
73@
73@
73@
73@
74
74
<<.;
54@.4
56.;
73.4
653
<<.;
54@.4
;<.;
64.4
6@5
64.4
@4.4
64.4
64.4
344
M
Total CMin.D
M&M& M M&M
6A
dail, /roduction rate as the denominator. -or instance, scheduled time a0aila+le
would +e nothing more than a regular @:hour shift minus time for scheduled
lunches, +rea(s, meetings, etc. This results in the scheduled time a0aila+le.
-or e"am/le, an @:hour shift [ C54 minutes for lunch \ 54 minutes for two
7;:minute +rea(sD ] < hours of shift time a0aila+le.
The factors that go into de0elo/ing the designed dail, /roduction rate
include the +usiness /lan sales forecast and a 0ariation coeUcient to co0er
customer demand mi"/0olume 0ariation. The com+ination of these factors
result in a designed dail, /roduction rate for the cell. -or e"am/le, a forecast
demand might +e
Monda, Tuesda, )ednesda, Thursda, -rida,
UnitsB 344 3@4 3?; 37; 36;
In order to accommodate the 0olume 0ariation and design a le0el /roduction
schedule, the cell:designed dail, /roduction rate would +e at 3=4 units /er
da,. This would +e +ased on re0iewing the demand 0ariation from da, to
da, or wee( to wee(, determining the a0erage demand for the ne"t ? to 73
months, and increasing the demand le0el to accommodate Luctuation +, a
coeUcient. In this case, the a0erage demand is 367 units /lus a 34W coeUcient,
or a dail, demand of 3=4 units Csee +elowD. The /ercentage is su+Fecti0e,
+ased on the amount of 0ariationM howe0er, it is not recommended to e"ceed
;4W of the a0erage +ecause a cell cannot +e designed for in2nite ca/acit,.
344 units \ 3@4 units \ 3?; units \ 37; units \ 36; units ] 734; units
734; ^ ; ] a0erage of 367 units /er da,
#ariation coeUcient ] C3@4 [ 367D ^ 367 ] 7<W Crounded to 34WD
C367
7.34D ] 3=4 units designed dail, /roduction rate

The ta(t time for the e"am/le a+o0e would +e 7.; minutes. The time a0aila+le
in minutes is < hours
?4 minutes, or 634 minutes. *i0iding 634 minutes

+, 3=4 units gi0es 7.; minutes, which is the ta(t time for that cell. To determine
ta(t time when there are multi/le /roducts running in the same cell,
it is necessar, to calculate the demand of all /roducts for that cell. It is then
;igure >/7A 4e)nition of "akt
Ta(t time CTTD Total time a0aila+le /er da,
*esigned dail, /roduction rate
] ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
67
a matter of ta(ing the designed dail, /roduction rate for each of the indi0idual
/roducts, adding them together, and using the total demand for all
the /roducts as the designed dail, /roduction rate for the cell and di0iding
that into the schedule time a0aila+le. This results in one ta(t time for the
cell, which encom/asses the demand of all /roducts for that cell.
*orkload Balancing and ne3Piece ;lo-
Hnce a cell ta(t time has +een determined, it is now a matter of com/aring
se0eral as/ects of the /rocess and the ta(t time in order to design a +alanced
cell. The o/erational elements Cmachine time, man time, and setu/ timeD of
each /roduct are e"amined with relation to ta(t time. Machine time is com/ared
to ta(t time in order to determine if the 2"ed c,cle time of an, /iece
of equi/ment is greater than the ta(t time. If this is so, action must +e ta(en
to change the a0aila+le time, o1 load, reduce the c,cle time, change /rocesses,
add equi/ment, s/lit demand, etc. If the o/eration remains greater than ta(t
time, it will need to +e +alanced with in:/rocess Nan+an in0entor, and/or
additional shifts.
Man time is com/ared to ta(t time to address two o//ortunitiesB C7D
autonomation and C3D wor(load +alance. The 2rst o//ortunit,, autonomation,
means equi/ment does not need to +e watched in case something goes
wrong. Autonomation equi/ment will automaticall, shut o1 when an a+normalit,
is disco0ered, there+, allowing the o/erator to do other 0alue:added
wor(. This o//ortunit, is in0alua+le for increasing /roducti0it, and qualit,.
The second o//ortunit,, wor(load +alancing, has to do with e"amining the
indi0idual wor( elements of each o/eration and determining if the, can +e
reduced, shifted, resequenced, com+ined, or eliminated. This e1ort to +alance
the wor(load to ta(t time is a main ena+ler for achie0ing one:/iece Low
and minimiIing manufacturing lead:times.
Setu/ times are almost alwa,s greater than ta(t time and need to +e
addressed as /art of the cell design /rocess. $, com/aring setu/ time to ta(t
time, one has a greater a//reciation as to how far setu/s need to im/ro0e in
order to create a Le"i+le wor( en0ironment. The initial sta(e in the ground
is to /lan on setting u/ each high:0olume /roduct e0er, da, and then to
schedule the /roduct mi" to run accordingl,. If this cannot +e accom/lished,
then /lan to run 3 to 5 da,sP worth at a time and hold the e"cess in0entor,
until the customer or customer cell as(s for it Cne0er allow this to e"tend
/ast more than a one wee(Ps runD. It will +ecome 0er, clear, 0er, quic(l,,
wh, setu/ reduction is so im/ortant, when the su//lier cell has to /h,sicall,
6:
hold the e"cess in0entor, until the customer cell as(s for it through a Nan+an.
Hnce each of these three o/erational elements is determined for each /roduct,
the, are com/ared to the o0erall ta(t time of the cell. This information is
/laced on a loading chart for each indi0idual /roduct SNU C-igure ?.77D.
-rom this /oint, it is a matter of generating ideas and loo(ing for cell
design solutions that will +alance the cell wor(load for all /arts and ta(t time.
$, re0iewing the actual wor( elements and either im/ro0ing the o/erations
or shifting the wor( content, the cell can +ecome more +alanced com/ared
to the ta(t. This is accom/lished much more easil, in an assem+l, en0ironment
than in a fa+rication en0ironment, +ut it can +e done in +oth.
)hen the o/erations are +alanced to ta(t time, it is /ossi+le to ta(e ad0antage
of a one:/iece Low a//roach to wor(Low instead of running in large
+atch quantities. )ith one:/iece Low, the manufacturing lead:time, le0el of
in0entor,, and feed+ac( on qualit, issues are far su/erior to that of a +atchand:
queue s,stem. In a +atch:and:queue s,stem, indi0idual /ieces are com/leted
at an o/eration and sit waiting in queue until the entire +atch is
com/lete, at which /oint the, are mo0ed to the ne"t o/eration in sequence
and wait in queue for other orders to +e com/leted that arri0ed there 2rst
+efore mo0ing forward. In the one:/iece Low a//roach, /roducts are /assed
one /iece at a time from o/eration to o/eration with a 2rst:in/2rst:out C-I-HD
/riorit,. Product manufacturing lead:times are now onl, as long as the total
of all the ta(ts the, had to get through. -or e"am/le, 20e o/erations each with
a ta(t of 7.4 minute require a manufacturing lead:time of 20e minutes.
Another signi2cant +ene2t to one:/iece Low is the im/act on qualit,. There
;igure >/77 'oading &$art
6<
are fewer units in Low to rewor( or scra/M if there is a defect found, the
feed+ac( is almost instantaneous and correcti0e action is ta(en on the s/ot,
not se0eral wee(s later.
Hnce we (now the c,cle time for the /rocess and we (now the designed
ta(t time, we can ta(e the (nown c,cle time and di0ide it +, the ta(t time
to determine the ma"imum staUng requirements for the cell. -or instance,
the c,cle time from the e"am/le a+o0e was ;.4 minutes. If ta(t time for that
/rocess were 3.; minutes, then the required staUng would +e two o/erators.
Actual head counts will 0ar, with changes in required dail, demand, which
is wh, cross:training and o/erator Le"i+ilit, are so im/ortant in su//orting
one:/iece Low.
&ell 4esign &riteria
)hen it comes to designing a cell, there should +e esta+lished a set of s/eci2c
design o+Fecti0es or criteria to +e achie0ed. These criteria are to +e the guiding
focus for good cell design. The following is a list of general criteria to consider
as /art of a good cell designB
7. $e sure that material Lows in one direction.
3. !educe material and o/erator mo0ement.
5. .liminate storage +etween o/erations.
6. .liminate dou+le and tri/le handling.
;. Locate /arts as close as /ossi+le to /oint of use.
?. UtiliIe tas( 0ariation to reduce re/etiti0e motion.
<. Locate all tools and /arts within eas, reach.
@. .nsure short wal(ing distances.
=. .liminate all wait time.
74. Nee/ in mind that 0ertical storage requires less s/ace than horiIontal
storage Cinclude Nan+an materialD.
77. La, out machines and tools +, /rocess sequence.
73. In0ol0e o/erators in the design /rocess Cincor/orate economies of
motionD.
&ell 'ayout
The cell la,out is a gra/hical re/resentation of the o/erator Low and material
Low C-igure ?.73D. It de/icts the /ath of the o0erall material mo0ement
through the cell and descri+es the designed o/erator sequence and o/erations.
6=
It shows the staUng le0els, ta(t time, c,cle time, designed in:/rocess stoc(
le0els, and qualit, and safet, chec(s required +, the cell. The cell wor( la,out
chart can then +e su//orted at a more detailed le0el with gra/hical wor(
instructions for each o/eration Csee ha/ter <D. The cell wor( la,out is /rimaril,
for training new o/erators, communicating standard wor( to management,
and dri0ing continuous im/ro0ement initiati0es.
Ban2an Si!ing
It is at this /oint in the cell design /rocess that the control of wor(Low through
Nan+an is determined. The num+er of Nan+ans and quantit, can +e determined
in a multitude of di1erent wa,s. There are se0eral di1erent formulas
that can +e utiliIed and which are identi2ed in most o/erational management
te"t+oo(s. There are /rimaril, rules of thum+ relati0e to the num+er of da,s
or wee(s of in0entor, located on the sho/ Loor, and there are simulation
model calculations +ased on the amount of wor( in /rocess +uilt u/ in wor(
queues due to /rocess 0aria+ilit,. The method of calculation is not that
im/ortantM
Fust /ic( one and use it. Most Nan+an s,stem im/lementations fail
;igure >/7: &ell 'ayout
65
+ecause of lac( of disci/line or lac( of training, not +ecause someone used
the wrong calculation. That ha0ing +een said, a sim/le formula has +een
included in this section as a /oint of reference as to how Nan+ans could Low
+etween a customer cell and a su//lier cell.
5anban *or!"la+
Ste/ 7.
Ste/ 3.
/ote+
Lot siIe ma, +e required due to weight, siIe, A,$, categoriIation,
setu/ times, common resources, outside su//liers, etc. !e/lenishment time
that is less than one shift would result in a two:+in s,stem. !e/lenishment
time that is greater than one shift would result in a card s,stem Csee -igure
?.75D. -or e"am/leB
;igure >/7< Ban2an System
Ban2an perational Rules &ontinued:
=/ By t$e time t$e replenis$ment parts arri(e# all
parts s$ould $a(e 2een consumed 2y t$e customer
cell/ If not# t$e remaining parts s$ould 2e placed on
t$e )rst incoming part container F;I;G/
5/ Replenis$ment time -indo-s must 2e ad$ered to
2y t$e supplier cell Fe/g/# : $ours# 7 s$ift# < daysG/
Ban2an perational Rules:
7/ As a part container is opened at t$e customer
cell# a Ban2an card is returned to t$e supplier cell/
:/ *$en t$ree cards are recei(ed 2y t$e supplier
cell# one day's worth of parts are produced/ "$is
is to accommodate long c$angeo(ers/
</ *$en t$e fourt$ card is recei(ed# one day's
worth of parts are s$ipped/
*esigned dail, /roduction rate re/lenishment time ChoursD
a0aila+le time
:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
:::::::::::::: ] Nan+an quantit,
Nan+an quantit,
lot siIe
::::::::::::::::::::::::::::::::::::::: ] Z of cards
6>
Ste/ 7.
JAK /arts ] 7/3 da, demand, or 6; /ieces
Ste/ 3.
7@4 /ieces ^ 6; /ieces ] 6 cards
.0er, Nan+an should ha0e the minimum identi2cation requirementsB
7. Part num+er
3. Part descri/tion
5. Part quantit,
6. Point of su//l,
;. Point of consum/tion
?. JHne ofX cardsK Ce.g., 7 of 5M 3 of 5M 5 of 5D
The o0erall a//roach to determining Nan+an siIes and the im/act on
in0entor, would includeB
7. 9athering the data required for each /art num+er in the cell
3. UtiliIing the Nan+an calculation to determine the Nan+ans in Low
5. *etermining the target in0entor, le0el +ased on the Nan+an quantit,
6. alculating the designed num+er of in0entor, turns
The determination of Nan+ans is an im/ortant ste/ in the cell design
/rocess +ecause Nan+ans are the limiting factor for in0entor, le0els Craw
material, wor( in /rocess, 2nished goodsD and are the control element on
lead:times. These o/erational as/ects Cin0entor, and lead:timeD ha0e a maFor
inLuence on continuous im/ro0ement within a cellular o/eration.
In his +oo(,
The ;"st68n6Ti!e Breakthro"gh+ 8!)le!enting the /ew Man"*act"ring
Basics
, Ha, descri+ed a test for determining if a cell is trul, a Fustin:
time wor( cellB JThe 2rst test is whether the /roduct is Lowing one at a
time. XThe second test to see if a machine cell is trul, a GIT cell is whether
the machine cell has the Le"i+ilit, to +e o/erated at di1erent out/ut rates
and with di1erent crew siIes.K
<
Although I would agree that these two as/ects
should +e e0ident in order to ha0e a cell, I would ho/e we ha0e a greater
a//reciation for Fust how man, other as/ects are necessar, in order to ha0e
a trul, successful lean manufacturing cell.
=4 /ieces 7; hours
<.; hours
::::::::::::::::::::::::::::::::::::::::::::::::: ] 7@4 /ieces
66
&ow that the ste/s for cell design ha0e +een identi2ed and we ha0e greater
insight into the im/act of material Low through the factor,, it is time to
address those as/ects which la, at the foundation of continuous im/ro0ement
and /ro0ide sta+ilit, to the cell E namel,, the Process ontrol element.
6@
6
Process &ontrol
Element
rocess ontrol focuses on sta+iliIing the /rocess, institutionaliIing the
change, and dri0ing continuous im/ro0ement acti0ities. The /roduction
/rocesses of man, manufacturing o/erations are not in control
nor are the, /erforming at the le0els necessar, to su//ort a lean en0ironmentM
therefore, there is a need to address these areas as /art of the im/lementation.
After a change has +een made to a /rocess, it +ecomes necessar, to Jloc( it
downK and maintain it as the new standard for o/eratingM howe0er, after
ha0ing set the new standard, the /erformance le0el should not +e limited to
that standard, so continuous im/ro0ement tools are used to esta+lish a new
le0el of /erformance. A good management /ractice to consider im/lementing
would +e that of e"/ecting standards to im/ro0e twice /er ,ear. According
to Shingo, in
A St"&y o* the Toyota Pro&"ction Syste!
, To,ota is e"tremel,
rigid in regard to its standards and e"/ects continuous im/ro0ementB JThe
To,ota /roduction s,stem demands that all wor( +e /erformed within standard
times, and sho/ su/er0isors are charged with holding wor(ers to those
standards. XSho/ su/er0isors are encouraged to feel em+arrassed when the
same standard o/erating charts are used for a long time +ecause im/ro0ements
in the sho/ o/erations should +e made continuousl,.K
7=
This cha/ter
deals with man, of the institutionaliIation as/ects of lean manufacturing
and descri+es methods that can +e utiliIed to foster the continuous im/ro0ement
as/ects of a lean manufacturing en0ironment.
This last /rimar, element, Process ontrol, focuses on a num+er of lean
manufacturing as/ects that sta+iliIe the standard methods of wor(ing and
then continuall, /ursues the setting of new standards for those methods.
P
?A
This element +rings to light se0eral acti0ities that la, the foundation necessar,
for a com/an, to reach world:class le0els of /erformance, and it is the /ursuit
of these acti0ities that sets the wheels of continuous im/ro0ement in motion,
there+, de0elo/ing /rocesses that are more ro+ust, relia+le, and /redicta+le.
This cha/ter highlights si" im/ortant acti0ities relati0e to Process ontrolB
7. Single:minute e"change of dies CSM.*D
3. Total /roducti0e maintenance CTPMD
5. Po(a:,o(e Cfail safeD
6. ;S Chouse(ee/ingD
;. #isual controls
?. 9ra/hic wor( instructions
.0en though these do not address all as/ects of the Process ontrol element,
the, do /ro0ide enough insight for an organiIation to initiate action on some
of the more critical areas.
Single3Minute Exc$ange of 4ies
The im/lementation of setu/ reduction is a cornerstone for an, lean
manufacturing
/rogram. The de/endenc, on Le"i+ilit, Ces/eciall, in fa+ricationD
is /aramount to allowing le0el /roduction schedules to Low. -ollowing are
+ene2ts of the single:minute e"change of dies CSM.*DB
7. .qui/ment changeo0er time measured in increments of less than 74
minutes
3. Minimal loss to through/ut time on equi/ment
5. The a+ilit, to run a greater 0ariet, of /roduct mi" across a gi0en
resource
6. $uilding toda, onl, what is needed toda,
The SM.* /rocess is not focused on the reduction of total time s/ent
doing setu/s, +ut rather on the /ursuit of conducting more setu/s in the
same amount of time. $, cutting changeo0er time in half, a cell can now
conduct twice as man, setu/s in the same amount of time. $, cutting them
in half again, a cell can now conduct four times as man, setu/s in the same
amount of time. The /rimar, o+Fecti0e is to +uild Le"i+ilit, into the /rocess.
Shigeo Shingo de0elo/ed SM.* as a manufacturing consultant to Ga/anese
com/anies during the /ost:)orld )ar II era. It too( se0eral ,ears for
?7
him to /erfect the /rocess of setu/ reduction and design it as a structured
set of ste/s used to deli0er incredi+le ca/a+ilit, to organiIations that ta(e
ad0antage of this com/etiti0e wea/on. The /rocess is not terri+l, diUcult,
and as much as <;W of the +attle has to do with a /ositi0e attitude. As Shingo
states in
The Sayings o* Shigeo Shingo+ 5ey Strategies *or Plant 8!)rove!ent
B
JItPs the easiest thing in the world to argue logicall, that something is
im/ossi+le.
Much more diUcult is to as( how something might +e accom/lished,
to transcend its diUculties, and to imagine how it might +e made /ossi+le.K
33
The /rocess has three +asic ste/sB C7D segregate the acti0ities, C3D recategoriIe,
and C5D reduce or eliminate ste/s as the, are done toda,. In ste/
one, identif, all the acti0ities in the /rocess. T,/icall,, most com/anies do
not reall, (now what their la+or force has to go through in order to ma(e a
setu/. It is not uncommon for an o/erator to ha0e to tra0el half a mile C3;44
feetD in order to accom/lish all the tas(s necessar, to ma(e a setu/. *onPt
Fust ta(e m, word for it. )al( the entire /rocess sometime. 'ou will +e
sur/rised at what ,ou learn. Hnce all the ste/s ha0e +een documented for
the setu/ /rocess, the, need to +e segregated into two categories. The 2rst
categor, is that of internal setu/ E those items that ha0e to +e done while
the machine is down. The second categor, is that of e"ternal setu/ E those
items that can +e done while the machine is running C-igure <.7D.
)hen the acti0ities ha0e +een identi2ed and segregated, the ne"t ste/ is
to re:categoriIe or shift as man, acti0ities as /ossi+le from internal to
e"ternal. T,/icall,, +etween shifting acti0ities from +eing internal to e"ternal
;igure 6/7 Identify Internal (s/ External Setup
% !etrie0e and stage /arts, tools for ne"t lot
% Pre:heat, /re:measure, /re:locate
% #erif, tool functionalit,
% lean and store tools
% Mo0e /arts to ne"t o/eration
?:
and conducting some good house(ee/ing /ractices, changeo0er time can +e
reduced +, ;4W.
Hnce setu/ acti0ities ha0e +een documented and re:categoriIed, the last
ste/ is to loo( at sim/lif,ing the setu/ /rocess for +oth internal and e"ternal
acti0ities. In0estigate standardiIing the setu/, minimiIing the utiliIation of
+olts and adFustments, and utiliIing sim/le one:turn t,/es of attachment
methodologies and such techniques as cams, interloc(ing mechanisms, slotted
+olts, secured washers, etc. Stri0e to ma(e the setu/ /rocess standard,
consistent, re/eata+le, and one that em/lo,ees can learn. Too often statements
are made a+out a /articular setu/ /rocess +eing too highl, s(illed or
too +lac( art or requiring too man, ,ears of e"/erience. All of these issues
need to +e designed out of the setu/ /rocess. Gust as Shingo stated in
A
Revol"tion in Man"*act"ring+ The SM1 Syste!
B JIt is generall, and erroneousl,
+elie0ed that the most e1ecti0e /olicies for dealing with setu/s address
the /ro+lem in terms of s(ill. Although man, com/anies ha0e setu/ /olicies
designed to raise the s(ill le0el of wor(ers, few ha0e im/lemented strategies
that lower the s(ill le0el required +, the setu/ itself.K
7@
-ollowing the three
+asic ste/s, utiliIing the techniques mentioned, and ha0ing an o/en mind
a+out the /ossi+ilities are all (e, ingredients to ma(ing a SM.* /rogram
Lourish.
"otal Producti(e Maintenance
A second cornerstone in su//ort of a lean manufacturing en0ironment is
that of total /roducti0e maintenance CTPMD. .qui/ment is integral to an,
manufacturing en0ironment, and the relia+ilit, of equi/ment in a lean
en0ironment
is /aramount to a trul, successful im/lementation. As in0entor,
le0els are reduced, the u/time on machiner, +ecomes e0en more im/ortant.
$ecause there is little in0entor, to +u1er un/lanned downtime in a lean
en0ironment, when a machine goes down the entire /roduction line goes
downM therefore, a formal TPM /rogram is instrumental in su//orting a lean
manufacturing im/lementation.
There are three main as/ects of a TPM /rogramB /re0entati0e maintenance,
correcti0e maintenance, and maintenance /re0ention. .ach one of
these com/onents has a di1erent mission and required outcome as /art of
the TPM /rogram. .ach has a signi2cant role to /la, and is necessar, for
world:class /erformance to +e sustained.
The 2rst, /re0entati0e maintenance, focuses on /re0enting +rea(downs
from ha//ening and is +, far the most recogniIed acti0it, relati0e to TPM.
?<
Pre0entati0e maintenance is concerned with the u/time or a0aila+ilit, of
equi/ment. The e1ort here is aimed at /erforming /re0entati0e maintenance
actions on equi/ment in a /re/lanned/scheduled manner, as o//osed to in
an un/lanned or chaotic manner. Also, the inclusion of o/erators in this
/rogram, s/eci2call, to conduct dail, maintenance on the equi/ment and
identif, a+normalities as the, occur, is /aramount to successful /re0entati0e
maintenance. $, doing this, the through/ut and a0aila+le ca/acit, on equi/ment
are signi2cantl, im/ro0ed.
orrecti0e maintenance concentrates on im/ro0ing re/aired equi/ment.
The idea here is that if com/onents from the original equi/ment (ee/ +rea(ing,
wh, not re/lace them with something +etterR -i"ing them with an
im/ro0ed com/onent results in longer equi/ment life and more u/time from
the equi/ment.
Maintenance /re0ention is an area that most com/anies neglect and /a,
0er, little attention to when designing or /urchasing new equi/ment. $ecause
one of the (e, ingredients of a successful TPM /rogram is that of dail,
o/erator Jautonomous maintenance,K it is im/erati0e that equi/ment +e eas,
to maintain on a recurring +asis. If the new machiner, is diUcult to lu+ricate,
if +olts are diUcult to tighten, and if it is im/ossi+le to chec( critical Luid
le0els, then it is 0er, unli(el, that o/erators will +e moti0ated to monitor
equi/ment on a dail, +asis. The total life:c,cle costs on equi/ment must +e
e"amined when /rocuring new machines, not Fust the one:o1, nonrecurring
costs.
In su//ort of TPM as /art of a lean manufacturing im/lementation, the
information relati0e to downtime on equi/ment is im/ortant. Most of the
time, if an, information is collected at all, it is when equi/ment has crashed
and the cause for the downtime condition is documented. .0en though this
is good, it /ro0ides onl, a /artial /icture as to the true through/ut loss on
equi/ment. There are in actualit, si" main reasons, with associated causes,
for through/ut losses on machiner, C-igure <.3D. Shirose identi2ed these
losses in his +oo(,
TPM *or $orksho) Lea&ers
, and declared them to +e
negati0e o+stacles to eUcienc,B JThere are two wa,s to im/ro0e equi/ment
eUcienc,B a /ositi0e wa, and a negati0e wa,. XThe negati0e was is +,
eliminating
the o+stacles to eUcienc, E o+stacles that in TPM are called the si"
+ig losses.K
35
.ach of these losses has an im/act on the through/ut and /lanned ca/acit,
of equi/ment. T,/icall, +rea(down is reall, the onl, loss for which we
ca/ture information, although all si" lead to a reduction in /roducti0it,.
$rea(down and setu/ Cchangeo0erD ha0e an im/act on machiner, a0aila+ilit,.
Minor sto//age and reduced s/eed ha0e a direct inLuence on the /roducti0it,
?=
of equi/ment when it is running. Sualit, and startu/ ,ield certainl, ha0e an
e1ect on a com/an,Ps a+ilit, to /roduce, /articularl, when a /ortion of
0alua+le ca/acit, is s/ent on /roducing /oor:qualit, /roduct.
A technique used to (ee/ the si" +ig losses in chec( is that of o0erall
equi/ment e1ecti0eness CH..D, which is measured as a /ercentage and utiliIes
information from un/lanned downtime, machine c,cle time, and /rocess
,ield to determine which of the si" +ig losses are ha0ing the greatest
im/act, there+, /ro0iding insight as to where to focus im/ro0ement e1orts.
An a//reciation of these si" +ig losses and how to reduce their e1ect on
equi/ment resources within the /lant will go a long wa, toward su//orting
a lean manufacturing /rogram.
Poka3Yoke F;ail SafeG
Human +eings will in0aria+l, ma(e mista(es. It is not /ossi+le to remem+er
e0er,thing that has to +e done at e0er, ste/ of /roducing e0er, /roduct with
e0er, Fo+. Peo/le will ma(e errorsM it ha//ensM howe0er, errors are the not
same as defects. A defect is what ta(es /lace after an error occurs. $, sorting
good /roduct from defecti0e /roduct at the end of the /rocess, a com/an,
cannot ho/e to achie0e a defect:free en0ironment. If, howe0er, errors are
caught +efore the, lead to defects, then a defect:free en0ironment +ecomes
/ossi+le. This is where the /ower of Po(a:,o(e comes into /la,.
Po(a:,o(e, another as/ect de0elo/ed +, Shingo after )orld )ar II, in
conFunction with source ins/ection, was designed to focus on the /ursuit of
qualit, at the source and ca/turing feed+ac( on defects as close as /ossi+le
to the root cause. In
<ero :"ality Control+ So"rces 8ns)ection an& the Poka6
4oke Syste!
, he statesB JA Po(a:,o(e s,stem /ossesses two functionsB it can
carr, out 744 /ercent ins/ections and, if a+normalities occur, it can carr,
out immediate feed+ac( and action.K
37
;igure 6/: "otal Producti(e Maintenance: Six Big 'osses
Breakdown: ;ailed function and reduced function
Setup and adjustment: Imprecise and nonstandard measurement
Idling and minor stoppage: sudden disruptions
Reduced speed: actual (s/ designed
Quality defects and rework: sporadic and c$ronic
Startup yield: process insta2ility
?5
Po(a:,o(e, or mista(e /roo2ng, is accom/lished through the de/lo,ment
of sim/le, ine"/ensi0e de0ises designed to catch errors so the, do not +ecome
defects. These de0ices are /laced in the /rocess to ensure that it is 0er, eas,
for the o/erator to do the Fo+ correctl, or 0er, diUcult for the o/erator to
do the Fo+ incorrectl,. The tools could +e /h,sical, mechanical, or electrical
C-igure <.5D.
A Po(a:,o(e could +e as sim/le as a chec(list for the o/erator or technician
to ensure that all ste/s in the /rocess are co0ered, much in the same
manner as /ilots going through a /re:Light chec(list +efore ta(ing o1. The
intent of the Po(a:,o(e is to sto/ defects at the source, to /ro0ide immediate
feed+ac( as to the cause, and to /re0ent the /assing on of defecti0e /roducts
to the ne"t customer in the /rocess.
5S F,ousekeepingG
.0er,thing has a /lace and e0er,thing in its /laceY If it does not warrant a
la+el, it does not warrant a /lace in the areaY These are words to li0e +, in a
lean manufacturing en0ironment. So, what is so im/ortant a+out house(ee/ingR
According to authors Henderson and Larco C
Lean Trans*or!ation+ (ow
To Change 4o"r B"siness into a Lean nter)rise
D, it is 0er, im/ortantB JMost
/eo/le underestimate the im/ortance of safet,, order, and cleanliness in the
wor(/lace. Hur former colleagues at To,ota and Honda will tell ,ou that 3;
to 54W of all qualit, defects are directl, related to this issue.K
=
;igure 6/< Examples of Error3Proof 4e(ices
?>
)hat is this thing called ;S C-igure <.6DR -or all /ractical /ur/oses, it
re/resents sim/le, sound, structured, s,nchronous, ser0icea+le house(ee/ing.
&o, that is not what ;S stands forM rather, the words are all Ga/anese,
coined +, To,otaB
7.
Seiri
CsiftingD
3.
Seiton
CsortingD
5.
Seiso
Cswee/ingD
6.
Seikets"
CstandardiIeD
;.
Shits"ke
CsustainD
The 2rst,
Seiri
, has to do with clearing the area of those items that are
not +eing used on a regular +asis Ce.g., the ne"t 54 da,sD. It is a matter of
sifting through and se/arating the clutter from the items that are needed to
ma(e it easier to wor(, easier for material to Low, and easier for o/erators
to mo0e, in addition to im/ro0ing utiliIation of s/ace.
Seiton
deals with identif,ing and arranging items that +elong in the area.
These items should all +e sorted and la+eled as +elonging in that area. If the
item is not im/ortant enough for a la+el, then it is not im/ortant enough to
sta, in the area. This ma(es recognition of the /ro/er tooling, resources,
materials, etc. e"tremel, 0isi+le.
;igure 6/= 5S F,ousekeepingG
J Arrange and identify all items in t$e cell Fno loose toolsG
J 'a2el locations for e%uipment# tools# and materials
J &lean up daily Fno grit or grimeG
J Be a2le to (isually identify any a2normalities
J .tili!e $ousekeeping audit c$ecklist
Screwdri0er Hammer )rench
?6
Seiso
has to do with maintaining order +, swee/ing and /ic(ing u/ on a
regular +asis Ce.g., dail,, +i:wee(l,D. A /roduction area should +e neat and
clean at the end of e0er, shift. There should +e nothing missing or out of
/lace. All tools and materials should +e accounted for. A well:maintained
area should +e a+le to accom/lish this using less than 3W C74 minutesD of
the dail, scheduled shift time.
Seikets"
is concerned with management disci/line to enforce the standard
acti0it,. If the house(ee/ing acti0it, does not +ecome institutionaliIed within
the o/eration, the area will not sta, clean and em/lo,ees will re0ert +ac( to
the old wa,s 0er, quic(l,. A regular, formal audit with quantitati0e and
qualitati0e e"/ectations should +e conducted and scores /osted for areas of
res/onsi+ilit,. Assigned areas of the Loor are im/ortant, +ecause if e0er,+od,
has res/onsi+ilit,, then no+od, has res/onsi+ilit,.
Shits"ke
is managementPs res/onsi+ilit, to reinforce the im/ortance of
house(ee/ing and to demonstrate leadershi/ +, follow:through and wal(ing
the tal(. Peo/le will /a, attention more to what management does than what
the, sa,. Proclaim that house(ee/ing is im/ortant, clarif, e"/ectations, wal(
the sho/ Loor, reward those who are /erforming, and constructi0el, disci/line
those who are not.
+isual &ontrols
The area of 0isual controls encom/asses such conce/ts as line:of:site
management,
or the a+ilit, to wal( onto the sho/ Loor and in a matter of minutes
(now the status of the o/eration, what might +e a+normal, how the material
is Lowing, what Fo+ is in wor( and what Fo+ is ne"t to go in wor(. It also
includes the conce/t of signage, which means that e0er,thing is dis/la,ed,
mar(ed, documented, and re/orted, so much so that an, indi0idual o1 the
street could wal( into the factor, and gi0e a /lant tour.
A (e, as/ect of 0isual control is that of sho/Loor /erformance measurement,
accom/lished through the dis/la, of a handful of measures Cthree to
20eD on the sho/ Loor for e0er,one to see and understand. As was stated in
ha/ter 6, these are to +e measures that are created, owned, monitored,
controlled, and understood +, those in the area. If a measure is created in
another area, then +rought to the sho/ Loor and /osted in another area, it
is 0er, unli(el, that /eo/le wor(ing in that area will reall, (now what it
means. )orse ,et, the, could not e"/lain how their Fo+ /erformance relates
to that measurement. It is im/ortant for indi0iduals to understand whether
their areas are /erforming to /lan, it is im/ortant for them to record how
??
the, are doing according to that /lan, it is im/ortant for them to ta(e
res/onsi+ilit, for that /erformance, and it is im/erati0e that the, (now how
to im/ro0e that /erformance. In addition, the, need a wa, to highlight
/ro+lems in order to recei0e /rom/t su//ort and correcti0e action.
The utiliIation of a 0isual control +oard or communication +oard C-igure
<.;D will /ro0ide the means to dis/la, /erformance status and communicate
/ro+lems. T,/icall,, the communication +oard is di0ided into two hal0es.
Hne half contains the sho/Loor measures of /erformance Ce.g., schedule
adherence, qualit,, c,cle time, etc.D. The other half contains a /ro+lem section,
where the o/erators can document /ro+lems the, are ha0ing. These
/ro+lems are re0iewed on a dail, +asis, actions assigned, resolution dates
committed, and mitigating actions recorded. This /ro0ides 0isi+ilit, to sho/Loor
/ro+lems that are otherwise hidden or /laced on a list to +e resol0ed
someda,. The im/ortance of 0isual controls is how the, ma(e im/ro0ement
acti0ities, issues, /erformance status, /ro+lems, and o/erational rules 0isi+le.
Grap$ic *ork Instructions
To consistentl, con0e, how a Fo+ is to +e /erformed according to documented
standard wor( sheets, the message needs to +e communicated in an easil,
recogniIa+le format. Te"t:+ased wor( instructions are /ro+a+l, the least
attracti0e means of accom/lishing this tas( and ,et are +, far the most widel,
utiliIed, /ro+a+l, +ecause this has +een the easiest wa, to +ring information
;igure 6/5 &ommunication Board
?@
to the sho/ Loor. The /ro+lem with te"t is that it is 0er, de/endent not onl,
on an indi0idualPs a+ilit, to learn from a written format +ut also on an
indi0idualPs a+ilit, to accuratel, descri+e actions as /art of a series of motions,
not to mention the cross:cultural language +arriers that can e"ist within the
/lant or when communicating glo+all, regarding /roducts or /roduction
methodologies.
In the /ast, A* drawings and +lue/rints were the onl, means of gra/hicall,
de/icting wor( and were 0er, time consuming to u/date and maintainM
howe0er, with the ad0ent of digital cameras, 0ideo recorders, and /resentation
software, there is no e"cuse for not /ro0iding gra/hic instructions in the
sho/ area. 9ra/hic:+ased wor( instructions are a far more e1ecti0e means
of communication than sim/l, te"t C-igure <.?D. The information can +e
ca/tured quic(l, through a digital camera and mani/ulated with software to
add color:coded legends that identif, wor( content +, o/eration, qualit,
chec(s, s/ecial notes, etc. The +eaut, of color is that it can transcend language
+arriers. If there is a concern o0er em/lo,ees who are color +lind, ma(e use
of standard s,m+ols. A green circle could re/resent wor( contentM a ,ellow
triangle, a qualit, chec(, etc. ."/loded 0iews, /articularl, of assem+l,
o/erations,
are of tremendous +ene2t, +ut the, do require s/eci2c software a//lications.
;igure 6/> Grap$ic *ork Instructions
@A
.ach /icture or slide can re/resent an o/eration or de/ict a +ill of material
for that o/eration with a date, re0ision, and signature +loc( for con2guration
control. )hen there is an im/ro0ement to the /rocess or the introduction
of a new /art, the old gra/hic can +e /ulled and re/laced with a new one in
as little as 54 minutes. The da,s of a manufacturing engineer ha0ing to s/end
se0eral da,s tr,ing to maintain and u/date wor( instructions are o0er.
The de/lo,ment of all 20e of these /rimar, elements of lean manufacturing
is essential for most com/anies to achie0e true world:class le0els of
/erformance. It is through the /ro/er sequencing and timel, im/lementation
of these elements that a com/an, can achie0e that illustrious le0el of
/erformance.
$ut, once this incremental change in /erformance is achie0ed, how
is it sustainedR The ne"t cha/ter will +rieL, touch on this issue.
@7
?
Sustaining t$e &$ange
ow comes the answer to the great m,ster, of how to (ee/ things the
wa, ,ou want them. The answer is X ,ou donPtY 'ou do not want
this /rocess to +e static. 'ou most assuredl, do not want it to fall
+ac(, +ut ,ou do not want it to sta, the same either. )hen com/anies sta,
the same, the, fall +ehind. hange is a constantM therefore, constantl, loo(ing
for new wa,s to im/ro0e the +usiness is the name of the game. If com/anies
are not im/ro0ing, at least at the rate of inLation, then the, are losing, and
ha0ing to face /ricing /ressures from the mar(et Fust com/ounds the seriousness
of the situation. om/anies need to constantl, /ush themsel0es to
challenge the
stat"s -"o
+, /erforming +etter toda, than ,esterda,. So how
is this achie0edR -irst of all, there is a need to institutionaliIe changes that
ha0e +een made to this /oint +, doing the followingB
7. *e0elo/ and de/lo, house(ee/ing audit chec(lists Ci.e., ;SD and ha0e
the management disci/line to re0iew them at least once a month.
3. All o/erational wor( is standardiIed, dis/la,ed, utiliIed as a +asis for
continuous im/ro0ement acti0ities, and im/ro0ed twice /er ,ear.
5. .ach manufacturing cell team is e"/ected to conduct a NaiIen e0ent
e0er, quarter.
6. Sho/Loor /erformance measures are u/dated +, the cell team dail,.
;. Pro+lem +oards are re0iewed at the end of e0er, da,.
?. ell teams hold standu/ meetings e0er, da, to re0iew /rogress and
issues.
<. Actual setu/ times are recorded with each changeo0er.
@. ross:training s(ill matrices are u/dated quarterl,.
=. .qui/ment is cleaned and chec(ed on a dail, +asis.
74. ustomers and su//liers are 0isited +, the cell team each quarter.
1
@:
After the change has trul, +een institutionaliIed, a focus on growing the
+usiness through new /roducts or mar(ets and /roduction ca/a+ilit, is ne"t.
The cell team accom/lishes this +,B
7. Loo(ing at the /roduci+ilit, of its e"isting /roduct +ase.
3. *etermining how lean the current /roduct design is and identif,ing
where o//ortunities e"ist to ta(e additional waste out of the design.
5. UtiliIing failure mode and e1ects anal,sis C-M.AD to im/ro0e the
ro+ustness of the manufacturing /rocess and minimiIe ris( of /oorqualit,
out/ut.
6. Loo(ing for o//ortunities to /ilot new /roduction.
;. Loo(ing for /otential im/ro0ements within the su//lier +ase.
?. Understanding cost, qualit,, and schedule issues with su//liers and
hel/ing them to identif, and eliminate waste from their /rocesses.
)hen ,ou ha0e reached this le0el of ca/a+ilit, within ,our manufacturing
organiIation, ,ou are de2nitel, well ahead of the /ac( and ha0e reached a
le0el 0er, few ha0e actuall, achie0edM howe0er, do not sto/ there. !emem+er
that lean manufacturing is the continual /ursuit of im/ro0ement and it is a
Fourne, that ne0er ends.
III
P.""I1G I"
A'' "GE",ER
@5
@
Setting t$e Stage
his section of the +oo( shows how to design and de/lo, a holistic lean
manufacturing /rogram. The following cha/ters contain a 2ctitious
+usiness stor, in which man, of the tools and techniques descri+ed in
this +oo( are utiliIed. Picture ,ourself in these cha/ters as the new *irector
of Lean Manufacturing for this com/an,, and follow along in the stor, to
learn how to design, de0elo/, and de/lo, ,our own lean manufacturing /rogram.
The stor, descri+es a current +usiness situation and demonstrates use
of the tools 0ia com/leted tem/lates to show how a lean manufacturing
/rogram is de0elo/ed and managed. Ta(e the time to read through the stor,
and understand the tem/lates, as learning +, doing is one of the +est wa,s to
retain (nowledge. H+0iousl,, one cannot instantl, gras/ all of the /otential
issues that need to +e addressed when de/lo,ing a lean manufacturing /rogramM
howe0er, I ha0e tried to include man, of the most common issues that
ha0e arisen o0er the ,ears during m, im/lementations. I ho/e ,ou 2nd this
stor, +oth worthwhile and entertaining.
Setting
!egal, Inc., in incinnati, HH, has +een in +usiness since 7=6;. The, started
out as a small, su+contract su//lier to the hea0, industrial ca/ital:goods
mar(et and +egan to grow when the, /ic(ed u/ small, niche:mar(et contracts
for the machining of s/ecialt, +earings, housings, and /istons. The housing
and /iston wor( came as an o_oad o//ortunit, when the /rimar, su//lier
was o0erloaded. !egal did good, high:qualit, wor( and had e"cellent
res/onse time.
"
@>
H0er the ,ears, !egal was a+le to e"/and the +usiness through niche
growth in the mar(et/lace and /ositioned themsel0es as the Jgo toK /la,er
with the original equi/ment manufacturers CH.MsD when it came time to
design new /roducts. Their re/utation and e"/ertise o/ened man, doors.
These o//ortunities led to further growth in the mar(et and growth within
the +usiness. The com/an, relocated to a ;44,444:square:foot facilit, across
town in 7=@4 and in0ested signi2cantl, in additional ca/ital equi/ment and
0ertical integration to meet the demands of the increased 0olume. The, had
+een achie0ing re0enue increases of a+out 7;W each ,ear for the last ; ,ears
and were enFo,ing o/erating /ro2ts of 34W, with no end in sight.
So, e0er,thing was loo(ing good until one da, one of their 2rst H.M
customers, who had +een with them since the 7=;4s, announced the rollout
of a new /iece of equi/ment which !egal (new nothing a+out. )hen the
com/an, as(ed the H.M wh, !egal had not +een utiliIed for this new design,
the, were told that a di1erent su//lier had +een more res/onsi0e +, o1ering
shorter lead:times, more consistent deli0er, /erformance, and more relia+le
/roduct qualit,, /lus the, /romised a cost reduction of ;W each ,ear for the
life of the contract and no hassles a+out deli0ering /roducts to the H.M
/lants as needed on a dail, +asis. !egalPs management 0iewed this as onl, a
minor set+ac(, until a second long:time H.M canceled an e"isting contract,
/aid the /enalt, for doing so, and went with a com/etitor for the same
reasons.
)ith this additional loss in +usiness, in order to maintain their 34W
o/erating /ro2t, management +elie0ed a reduction in wor( force was the
ne"t logical alternati0e. Hn the da, the, were to ma(e the 2nal decision, a
recruiter called the #ice President of H/erations at !egal and e"/lained that
he had the resum` of an indi0idual that the com/an, might +e interested in
seeing. $ecause the 0ice /resident and the recruiter were long:time 2shing
+uddies, he agreed to re0iew the resum` and had it fa"ed o0er.
Main &ast
Presi&ent+
$rian Ste0ens
'ice Presi&ent o* 2)erations+
*a0id $rice
'ice Presi&ent o* Sales an& C"sto!er Service+
$ar+ara Stearn
'ice Presi&ent o* Pro&"ct 1evelo)!ent+
Samuel $utton
1irector o* ("!an Reso"rces+
Heather *ale
Controller+
Gose/h $illings
1irector o* 8n*or!ation Syste!s+
Paula )right
Setting the Stage
@6
1irector o* Material Manage!ent+
Ste0e Phel/s
Plant Manager+
!ichard Gohnson
Manager o* Pro&"ction ngineering+
arl )ithers
%irst6Line S")ervisor+
Ga(e Holden
1irector o* Lean Man"*act"ring =newly hire&>+
!o+ert Games
4iagnostic Information
Sales ?@@A B
a?5 M
ProCt ?@@A B
a73.4 M
Sales ?@@D B
a<5 M
ProCt ?@@D B
a76.? M
Sales ?@@@ B
a@5 M
ProCt ?@@@ B
a7<.6 M
Sales EFFF B
a?; M C/roFectedD
ProCt EFFF
E a75.4 M C/roFectedD
(ea&co"nt ?@@A B
634
(ea&co"nt ?@@D B
6@<
(ea&co"nt ?@@@ B
;;5
(ea&co"nt EFFF B
655 C/roFectedD
"$e Inter(ie-
The ne"t da,, !o+ert Games arri0ed at !egal, Inc., for an @B44 a.m. inter0iew.
He was ushered into the +uilding and de/osited at the oUce of *a0id $rice,
the #ice President of H/erations. At a+out @B34, *a0id rushed into the oUce,
out of +reath, and introduced himself to !o+ert.
J9ood morningY This /lace is a mad house,K e"claimed *a0id. JI donPt
(now how we could ha0e lost that +usiness, +ut we will Fust ha0e to suc( it
u/ and wor( harder to ma(e it ha//en, I guess.K
J)hat +usiness is thatRK inquired !o+ert.
JHh, a long:time customer of ours, $O* Industries, has decided to design
and de0elo/ its latest /roduct without in0ol0ing us.K
J)h, did the, do thatRK as(ed !o+ert.
JHh, the, made some e"cuse a+out us not +eing res/onsi0e to their needs
and our continuing to raise /rices on them,K re/lied *a0id.
J)ere the, correctRK
J&ot as far as IPm concerned. 'ou see, we ha0e +een doing +usiness with
them for nearl, 64 ,ears, and Fust +ecause some new /la,er has come into
the mar(et/lace, ma(ing im/ossi+le claims a+out reducing /rices ,ear after
,ear and res/onding to their schedule needs on a dail, +asis, the, ha0e
decided to change their lo,alties.K
@?
Jan !egal meet those identi2ed /erformance requirementsRK
J&o wa,Y If we made those (inds of outrageous commitments, we would
lose our shirtY Hur qualit, would su1er, and the rest of our customer +ase
would +e im/acted.K
JIf the mar(et/lace is as(ing for those (inds of requirements, and ,our
com/etition is demonstrating the a+ilit, to satisf, those requirements, donPt
,ou thin( ,ou ma, ha0e more than a short:term /ro2ta+ilit, /ro+lemRK
queried !o+ert.
JI am not so sure that this com/etitor, $lue Iron, can actuall, deli0er
what the, sa,. Their o/eration is located in the southwest, which is not as
geogra/hicall, close to $O* as we are, and, +esides, the deli0er, res/onsi0eness
that $lue Iron is claiming is unheard of in our industr,,K e"/lained
*a0id.
J)ell,K !o+ert said, Jm, +rother:in:law ha//ens to wor( at !egional
onsolidated, which is a maFor customer of $lue Iron, and the, d
o
deli0er
on those e"/ectations. The, do reduce /rices each ,ear through cost reductions
and the, do res/ond to scheduled needs of the customer.K
J*o the, reall,RK
J'es, the, doY Let me as( ,ou, do ,ou get out much to tal( with customers
or do ,ou com/are !egalPs /roducts to the com/etitionPsRK as(ed !o+ert.
J&o,K said *a0id, rather shee/ishl,. J)e donPt get out much at all. So
much of our time is s/ent (ee/ing the o/eration running that there is no
time to get out and see customers or com/are /roducts.K
JLet me as( ,ou this. )hat /ercentage of ,our current sales +ase is made
u/ of new /roductsR I mean /roducts that ha0e +een introduced within the
last three ,ears,K as(ed !o+ert.
J)e ha0e targeted a+out ; to 74W. )e are currentl, at a+out ;.K
JHow ha0e ,ou +een a+le to sustain the growth ,ouP0e had without
introducing new /roducts at a higher rateRK
JMost of the sales growth, in the last cou/le of ,ears, has come from /rice
increases on our current /roducts, +ecause our unit 0olume has +een Lat.K
J)ould ,ou e"/ect those e"isting mar(ets to ha0e requirements similar
to $O* in the near futureRK as(ed !o+ert.
JI donPt (now. I guess I ne0er reall, thought a+out it.K
J)ell, if !egal, Inc., has an, indication that this could +e the new required
le0el of /erformance in the mar(et/lace, I would recommend that ,ou loo(
at a di1erent wa, to align ,our o/erations to /erform at that new le0el,K
!o+ert o1ered.
J*o ,ou (now of a wa, to do thisRK
JThatPs wh, IPm here. So, letPs tal(XK
@@
7A
,o- It Begins
hen *a0id introduced !o+ert to !egalPs to/ management team
as the new *irector of Lean Manufacturing, there was a fair
amount of e,e rolling and +lan( stares in the room. *a0id
e"/lained to the grou/ that, due to the recent de0elo/ments with $O*, there
ma, +e the need to re:e"amine how the, currentl, conduct +usiness. JThere
is an indication,K said *a0id, stretching the truth a little, Jthat this ma, +e
onl, the +eginning of a long wa0e of com/etiti0e erosion of our customer
+ase. )e need to re0isit how we are currentl, conducting +usiness +efore we
Fust eliminate heads from the /a,roll.K
$rian Ste0ens, President of !egal, as(ed, J)h, do we need to re0isit our
current mode of o/erationsR If we Fust get some of the e"cess heads o1 the
+oo(s and ma(e e0er,one aware the, need to wor( harder, we should +e all
right. )e can weather this storm. $esides, this com/etitor wonPt +e a+le to
deli0er on these /romises, and $O* will come +ac( to us, hat in hand, within
the ne"t si" months.K
JIPm afraid thatPs not true,K re/lied !o+ert. JI (now a+out this com/an,
through se0eral of its current customers, and $lue Iron
&oes
deli0er on their
/romises. The, do quite well in their niche mar(ets and are +eginning to
e"/and into additional areas, !egalPs +eing one of them. The, a//ear to target
mar(ets that ha0e growth o//ortunities coming through new /roduct
de0elo/ments.
The, align with customers who are loo(ing to attain the ne"t le0el
of /erformance and who are disenchanted with their current su//l, +ase of
mature, slow:mo0ing com/anies.K
J)hat le0el of /erformance are we tal(ing a+outRK as(ed $ar+ara Stearn,
#ice President of Sales and ustomer Ser0ice.
JThe +enchmar( for man, com/anies stri0ing for world:class le0els of
/erformance would +e ;4\ in0entor, turns /er ,ear, same:da, deli0er, on
*
7AA
customer orders, manufacturing lead:times of one wee( ma"imum, in:/rocess
qualit, le0els a//roaching ==W roll:through ,ield, and annualiIed cost
reductions of ; to 74W each and e0er, ,ear,K said !o+ert.
JThose /erformance le0els are unheard of in our industr,YK +ar(ed !ichard
Gohnson, !egalPs Plant Manager. J&ot one of our customers is e"/ecting
us to achie0e those le0els of /erformance.K
JIPm afraid that customers ha0e a funn, wa, of deciding what is and is
not an acce/ta+le le0el of /erformance,K said !o+ert. J'ou see, the /erformance
target is constantl, changing, and if one of ,our customers hears a+out
a com/etitor who is achie0ing such le0els of /erformance, that now +ecomes
the new standard for that customer. Thin( a+out it ,ourself, as a consumer.
Ten ,ears ago, when ,ou wanted new or re/lacement /arts for ,our car or
some consumer electronics giImo, ,ou went to the retail outlet, told them
what ,ou wanted, and ho/ed that the, carried it in stoc(. If the, didnPt, then
,ou were /laced on +ac(order and the /art ma, ha0e shown u/ 6 to ? wee(s
later. Toda,, ,ou search the Internet for what ,ou want and order it, and it
arri0es at ,our door in man, cases the ne"t da,. Ten ,ears ago, most consumers
would ha0e ne0er dreamed of that (ind of res/onsi0eness, +ut the,
are coming to e"/ect it toda,, Fust as $O* is now demanding new le0els of
/erformance from its su//l, +ase.K
J$ut $O* is onl, one of man, customers we ha0e. Surel, the, wonPt all
demand that le0el of /erformance, will the,RK as(ed $ar+ara.
JI donPt (now, $ar+ara. Ha0e ,ou as(ed them latel,R Ha0e we inquired
a+out what /erformance le0el the, need or are recei0ing from the com/etitionR
*o we (now how we stac( u/R Are we leading or laggingR As head of
sales and customer ser0ice, do ,ou ha0e an, information relati0e to thisRK
inquired !o+ert.
J)e (ee/ some information in our data+ase as to the com/etition, +ut
it is gathered onl, when we introduce a new /roduct line, which has +een a
while,K stated Samuel $utton, #ice President of Product *e0elo/ment. JIn
additionXK
After a+out an hour of discussion among the management team, the,
2nall, reached the general consensus that !egal, Inc., was not reall, /re/ared
to com/ete in the mar(et/lace of the future. The, all agreed it was a good
idea to +ring !o+ert on +oard to let him guide their o/eration down the
/ath to +ecoming a lean manufacturer.
7A7
77
"$e Game Plan
he /roFect team assigned to design, de0elo/, and de/lo, this lean manufacturing
/rogram met the following Monda,, August 3. The team
consisted of se0en full:time, dedicated em/lo,ees, including the team
leader, !o+ert. The team consisted of Heather *ale, from Human !esourcesM
Gose/h $illings, the controllerM Paula )right, from Information S,stemsM Ste0e
Phel/s, who re/resented materials managementM !ichard Gohnson, who
re/resented
/lant managementM and arl )ithers, from Production .ngineering.
The, s/ent a signi2cant amount of time that morning discussing wh, the,
were together, wh, there was a need for this team, wh, were the, selected,
what
the, were e"/ected to accom/lish, etc. !ichard s/ent much of the morning
e"/laining who he was, wh, he was there, wh, the, were there, and wh, this
was an e"tremel, im/ortant /rogram for the future of the organiIation.
After a+out four hours of discussion, de+ating, 0enting, and clarif,ing,
the, e0entuall, +ecame comforta+le a+out the /roFect and its o+Fecti0es. The,
s/ent time writing out a /roFect charter C-igure 77.7D to clarif, their
understanding
with e"ecuti0e management in regard to the o0erall sco/e and o+Fecti0es
for the /roFect. The, identi2ed /otential ris(s, issues, and assum/tions
a+out the /roFect. Through !o+ertPs facilitation, the team identi2ed s/eci2c
goals for the lean manufacturing /rogram, de0elo/ed an o0erall rolling:wa0e
milestone /lan C-igure 77.3D that co0ered the /roFect duration, and assigned
su+Fect matter e"/erts aligned with the -i0e Primar, .lements as followsB
A
HrganiIation .lement E Heather *ale
A
Logistics .lement E Ste0e Phel/s
A
Process ontrol .lement E arl )ithers
A
Manufacturing -low .lement E !ichard Gohnson
A
Metrics .lement E Gose/h $illings
"
7A:
$ecause the team had de0elo/ed this /lan together, the, had a common
understanding of where the, were going, what the, were going to accom/lish,
and what success loo(ed li(e when the, got there.
Hn August =, !o+ert had the team meet with e"ecuti0e management to
demonstrate their understanding of the assignment, to assure clari2cation of
/roFect direction and /roFect duration, and to esta+lish goal alignment. After
the, recei0ed e"ecuti0e managementPs /ermission to mo0e forward, the /roFect
team /roduced a 74: to 73:slide /resentation for e"ecuti0e management to
deli0er to the organiIation. It contained an o0erall stor, line e"/lainingB
7. The current state of the +usiness
3. )h, a lean manufacturing /roFect team had +een assem+led
5. The /roFect teamPs charter
6. The o0erall schedule Cmilestone /lanD
;. ManagementPs commitment to (ee/ e0er,one informed as to /roFect
/rogress
?. How e0er,one would 2t into the o/eration when it was designed
;igure 77/7 ProCect &$arter
Regal# Inc/
TitleB
Pur/oseB
H+Fecti0eB
HutcomesB
ProFect HwnerB
Team LeaderB
ProCect &$arter
-ormB 476
'ean Manufacturing Program :7
*esign, de0elo/, and im/lement a lean manufacturing en0ironment
+, focusing on the 0alue stream for in:house manufacturing and
material Low.
C7D Autonomous /roduction units. C3D Self:directed wor( teamsM relia+le
and /redicta+le demand management. C5D Nnowledge transfer of lean
manufacturing techniques. C6D Mo+iliIe cross:functional /roFect team.
C;D -acilit, la,out and /roduct /erformance res/onsi+ilit, aligned +,
/roduct grou/ing. C?D Assess and select cell team leaders.
C7D Im/ro0ed deli0er, /erformance from ;?W to =@W to !S*.
C3D Manufacturing lead:time of less than 7 wee( for all /roduct
grou/ings. C5D In0entor, turns C!M, )IP, -9D of 5;.
C6D *irect la+or /roducti0it, im/ro0ement of 3;W on runner /roducts.
C;D A ;4W reduction in all identi2ed &#A acti0ities.
$rian Ste0ens
!o+ert Games
The Ga!e Plan
7A<
)hen $rian deli0ered the message to the organiIation, through a town
hall meeting, he o/ened +, sa,ing, J)e at !egal ha0e enFo,ed man, ,ears of
success, and we wish to continue in that same tradition of success. The wa,
we ha0e conducted +usiness u/ to this /oint has +rought us all a great deal
of +ene2t. )e ha0e achie0ed great success in growing our o/eration and
should +e /roud of our accom/lishments. Howe0er, in order for us to continue
growing our com/an,, we need to loo( at conducting +usiness in a
di1erent manner. om/etition is getting tougher, and it would a//ear there
are a num+er of com/anies ni//ing at our heels and loo(ing to ta(e our
customers awa,. )e cannot continue to sur0i0e without a customer +ase,
and our customer +ase is +ecoming more and more demanding.
JSo, as our customerPs requirements change, so too do we need to change.
Therefore, in light of this situation, we ha0e assem+led a cross:functional
team sta1ed with some of our +est /la,ers, who will +e wor(ing full time for
the ne"t ? to = months on designing and im/lementing a new manufacturing
o/eration. The, will +e coming to ,ou for information, as(ing for ,our in/ut,
and see(ing ,our hel/. I would as( that ,ou /ro0ide them with honest, factual
information and when as(ed for ,our o/inion to res/ond o/enl,. As /art of
the anal,sis and design /rocess, the, will +e coming to ,ou for concurrence
and feed+ac( regarding the design. 'our in/uts are im/ortant. )ithin the
ne"t three months, we will +egin to im/lement this /rogram and will again
;igure 77/: Milestone Plan
Regal# Inc/
ProFect &ameB A$ Lean Manufacturing Program
ProFect ZB 37
: Lean Assessment is om/lete O A//ro0ed
7A=
+e soliciting ,our ideasM howe0er, during im/lementation, ,ou will +e the
maFor /la,ers in the /rocess +ecause ,ou will +e in0ol0ed in the actual design
and arrangement of ,our wor( areas. 'ou will ha0e a sa, as to what goes
where and how the wor( will Low. )e will +e guided +, some new o/erating
/rinci/les, +ut ,ou will ha0e an o//ortunit, to design out man, of the wastes
that are currentl, /art of ,our e"isting /rocesses.
JThis will all +ecome more clear as the coming months unfold and we
will +e in a more informed /osition to answer man, of the questions I am
sure ,ou ha0e at this /oint. )e will +e setting u/ a suggestion +o" for +oth
ideas and questions concerning the /rogram. As the team gets further into
the /rogram, we can re/ort on /rogress and answer more of the questions
as we go along. This is a 0er, e"citing time for us at !egal. I (now change
can +e diUcult and a little scar,, +ut if we all (ee/ a /ositi0e attitude and
o/en mind as to what de0elo/s, I am con2dent we will come out on the other
side a much stronger and more ca/a+le organiIation for our customers. I
than( ,ou in ad0ance for ,our su//ort.K
7A5
7:
'ean Assessment
fter $rianPs announcement to the organiIation, the team was read,
to +egin /hase one E Lean Assessment. The /roFect team set u/ their
war room, went through three da,s of intense lean manufacturing
training on the -i0e Primar, .lements with !o+ert, and +egan the tas( of
assessing the o0erall le0el of leanness of the o/eration C-igures 73.7 to 73.6D.
$, August 7=, the team had gathered the lean ga/ anal,sis information
+, /roduction /rocess and loaded it into the /roFect data+ase. The, were
now read, to +egin documenting o/erational /erformance data +, +oth
/roduct grou/ and /rocess C-igure 73.;D.
$efore the, +egan collecting the /erformance data, Paula made the comment
to the team, JI +elie0e much of the data we need are contained within
our +usiness s,stem.K
!o+ert stated, J.0en though that ma, +e true, Paula, I would encouraged
the team to go to
ge!ba
bthe Ga/anese word for wor( sitec to retrie0e the
data. .0en though much of the identi2ed data could reside in the s,stem, it
ma, not +e accurate, and this initiati0e needs to +e a 0er, hands:on /rogram.
In addition, it is im/ortant for us to +e seen on the sho/ Loor, tal(ing with
the o/erators and gathering their insight. The, are going to +e 0er, s(e/tical
at this /oint, and we need to +e (eenl, aware of their concerns. )e will need
to use the s,stem:generated data, +ut Fust not as the 2rst source at this time.K
The team created a +aseline tem/late for the data collection, +ro(e into
/airs, and went to the sho/ Loor to learn a+out the current manufacturing
/rocesses. The, alread, had an idea a+out the current wea(nesses in the
o/eration +ased on the lean assessment scoring, which was com/leted earlier.
The team segregated the sho/ +, assem+l,, fa+rication, and /roduct grou/s.
Heather and arl too( assem+l,, !ichard and !o+ert too( fa+rication, and
Gose/h and Ste0e too( /roduct grou/s.
A
7A>
)hen as(ed +, Heather what he thought a+out all this, arl answered, JI
donPt (now. It seems li(e a sound a//roach on /a/er, +ut that is onl, /a/er.
)hat ha//ens in im/lementation, now thatPs realit,. I am not quite sure ,et
how we design out our current o/erational /ro+lems and de0elo/ a s,stem
that is res/onsi0e to these new le0els of /erformance. )hat do ,ou thin(RK
;igure 7:/7 &ontinuous "raining
;igure 7:/: 'ean Manufacturing Benc$mark
Lean Assess!ent
7A6
JI am concerned a+out how the /eo/le are going to /ercei0e the lean
manufacturing /rogram,K said Heather. JI mean, we want to in0ol0e them
and solicit their in/ut, +ut I Fust donPt (now how the, are going to +u, in to
the changes. It seems to me that, to engage them in the /rocess, we need to
;igure 7:/< 'ean Manufacturing Benc$mark: Scoring
;igure 7:/= &ell Audit
,
ell name was hardl, 0isi+leM howe0er, +oundaries were well mar(ed on the sho/
Loor. A larger C/oster:siIeD cell name should +e utiliIed.
It was 0er, e0ident on all /art num+ers 0iewed. P$ su+assem+lies are using Nan+anM
howe0er, not at the /lanned le0els.
A wor(a+le wor( /rocess was su//osed to ha0e recentl, +een documentedM howe0er,
it still requires additional de0elo/ment.
A wor(a+le wor( chec(list is +eing utiliIed.
7 3 5
incinnati, HH Scoring
Nan+an
74 .qui/ment rearrangement
com/lete
7A?
2nd out what would moti0ate them to change. Show them where the, 2t
into the /rogram.K
JI thin( ,ou ha0e a good /oint there. )hen we get a chance, we need to
tal( with !o+ert a+out those issues,K said arl.
As !ichard and !o+ert made there wa, to the +ac( sho/s, where the
fa+rication o/erations were located, a 2rst:line su/er0isor named Ga(e
a//roached !ichard and as(ed, JAm I going to ha0e a Fo+ when this is o0er,
Mr. GohnsonR $ecause I ha0e a cousin o0er in Louis0ille who went through
one of these Vlean thingsP and the, laid o1 nearl, half the /lant and outsourced
almost all the wor( to somewhere else.K
!ichard reassured him +, sa,ing, JGa(e, ,ou do not ha0e to worr, a+out
losing ,our Fo+ as a result of this lean /rogram. )hen all is said and done,
,our Fo+ ma, ha0e changed or ,ou ma, +e doing a di1erent Fo+, +ut ,ou
wonPt +e eliminated from the /a,roll, unless, of course, ,ou do not want to
wor( in the new lean manufacturing en0ironment. 'ou see, the thing is if we
donPt do something li(e this now there is a good chance I will need to send
/eo/le out the door later, and I donPt want to do that.K
JI understand,K said Ga(e.
As Ste0e and Gose/h made their wa, to the shi//ing area to as( the /ac(ers
questions /ertaining to the handling times of SNUs, Gose/h made the statement,
JThis /rogram is reall, going to /la, ha0oc with m, o0erhead a+sor/tion
num+ers. All the indi0idual de/artment allocations are measured +,
each o/erationPs hours /roduced /er da,. If we start changing the focus to
;igure 7:/5 'ean Assessment 4ata &ollection Items
% S/ace Csq. ft.D
% )IP le0el Ca or equi0alentD
% Tra0el distance C/arts and /eo/leD
% Manufacturing lead:time CunitsD
% *T* lead:time Cda,sD
% Hut/ut//erson/unit C/c/minuteD
% .Ucienc, CWD
% hangeo0er time CminutesD
% Sta1 le0el CheadsD
% Un/lanned downtime CminutesD
% Scheduled time ChoursD
% Actual time ChoursD
% Planned out/ut CunitsD
% Actual out/ut CunitsD
% Planned mfg. c,cle time CminutesD
% Actual mfg. c,cle time CminutesD
% Z of units rewor(ed
% Z of units defecti0e
% .m/lo,ee turno0er CWD
% .m/lo,ee a+sences CWD
% Annual out/ut 0olume CunitsD
Results reIected
2y process# 2y product
Lean Assess!ent
7A@
actual out/ut for a cell, our o0erhead ma, not +e a+sor+ed as it has +een
+udgeted and that will lea0e us under:a+sor+ed, which a1ects our /ro2t
num+ers.
J$ut, it has +een that indi0idual focus on VlocaliIed o/erationsP and /roducing
more hours than we need to satisf, the customer demand that has
caused us to ha0e the long lead:times that now e"ist in the factor,,K said
Ste0e. J)e need to concentrate on im/ro0ing the o0erall /rocess and quit
focusing on the indi0idual o/erations, if we e0er e"/ect to achie0e the le0els
of /erformance that ha0e +een targeted.K
As the /roFect team was gathering information on the /rocess, Paula was
setting u/ the data+ase that would house all the data +eing collected. She
de0ised a sim/le s/readsheet design with ta+s for each of the /roduct grou/s
according to /roduction /rocess. This wa, no matter what data the, needed
for anal,sis, the, were 0er, eas, to e"tract. As each team com/leted their
tem/lates, the, were turned into a data entr, cler( to load into the data+ase.
Hnce the /roFect team had com/leted the data gathering, the, were read, to
de0elo/ an understanding of the mar(et/lace.
!o+ert showed the /roFect team two tem/lates C-igures 73.? and 73.<D
and told them to identif, who in the organiIation had access to the information
necessar, to com/lete the requested information. Paula felt that she
ma, +e a+le to e"tract some of the data from the +usiness s,stem, +ut most
of it would ha0e to come from other sourcesB JI (now I can /ull and segregate
;igure 7:/> Manufacturing Strategy: Market Segmentation
77A
the sales data +ased on histor,, +ut the total mar(et and /otential mar(et
ha0e to come from sales and customer ser0ice.K
arl stated, JI donPt thin( customer ser0ice would +e the /lace to 2nd
those /roFected data. I thin( /roduct de0elo/ment should ha0e a 0iew of the
total mar(et requirements.K
JMa,+e we need to tal( with +oth,K said !o+ert. J)h, donPt we +ring in
$ar+ara and Samuel, with a few of their /roduct e"/erts, and discuss with
them who has access to which data and then wor( with those e"/erts to
com/lete +oth of these tem/lates. !emem+er, we need to ha0e a /rett, relia+le
0iew of the current mar(et/lace, /articularl, where s/eci2c /roduct o//ortunities
e"ist, and in/ut from the customers as to where we are com/etiti0e
and where we are not. This is where much of our design criteria information
will +e drawn from in order to align with mar(eting as we get into the -uture
State *esign /hase.K
As the team com/leted this 2nal data:gathering e1ort, the, were a+le to
draw a good /icture of how !egal stood in relation to the conce/t of lean.
The, had an increased understanding of the mar(et/lace through actual data
collected from the customers through sur0e,s and inter0iews. The, /resented
their 2ndings to e"ecuti0e management on August 3<. There was not a lot of
de+ate o0er the num+ers Cwhich had +een seen in the /astD, +ecause the
/rocess
owners $ar+ara and Samuel had +een /art of the e"ercise and had alread,
+ought into the 0alidit, of the data. U/on recei0ing a//ro0al for the wor( in
/hase one, the team was released to mo0e onto /hase two E urrent State 9a/.
;igure 7:/6 Manufacturing Strategy: &ompetiti(e &riteria
777
7<
&urrent
State Gap
he 2rst order of +usiness for the /roFect team was to gain a +etter
understanding of the o0erall /rocess Low of the factor,. The, all had
their own ideas a+out how the, thought the /rocess wor(ed, +ut
no+od, was con2dent a+out reall, (nowing for sureM therefore, !o+ert once
again had the /roFect team s/lit into grou/s. The 2rst grou/ consisted of
Paula, !ichard, and Ste0e, who were to create an o0erall material and
information
Low ma/ of the o/eration to gain a +etter insight into how the
/h,sical material and information currentl, Lowed within the /lant. The,
would identif, the communication lin(s +etween su//liers and customers
Cinternal and e"ternalD, the medium used to /resent the information, and
how often there was an information transaction C-igures 75.7D.
The second grou/ was made u/ of Heather, arl, and Gose/h, who were
gi0en the tas( of generating a Le0el 4 and Le0el 7 /rocess ma/ of the current
/roduction /rocess. The, were shown how to gather the necessar, information
through a su//lier:in/ut:/rocess:out/ut:customer CSIPHD methodolog,
C-igure 75.3D. !o+ert challenged the teams to gather enough information
a+out the e"isting /rocess in order to ma(e good decisions in the -uture
State *esign /hase, +ut not so much information that the, got +ogged down
with anal,sis /aral,sis. JThat is wh, it is im/ortant to sta, at a Le0el 4 and
Le0el 7 for the SIPH,K he e"/lained. J)e are tr,ing to descri+e VwhatP is
ha//ening in the /rocess, not Vhow.P )e ha0e targeted two wee(s for com/letion
of this e1ort, /er our milestone /lan. In order to sta, on schedule,
we need to +e read, to /erform root cause anal,sis +, Se/tem+er 74.K
"
77:
$, <B54 a.m. Monda, morning, +oth grou/s were o1 and running. Paula
had ta(en the lead for de0elo/ing the material and information Low ma/.
H0er the wee(end, she had +een thin(ing a+out how the, might a//roach
it. JI thin( if we identif, the /roduction /rocesses that were loaded on the
data+ase and re0iew the /roduct families we created during wee( three, we
will ha0e a good indication as to where to start. I thin( we should la, out
the maFor /rocesses on a white +oard and re/resent the /rimar, /h,sical
material Lows with the color green and show the /rimar, information Lows
in red.K
JHnce we ha0e that de0elo/ed, we can inter0iew those in the /rocess as
to the format or medium used to transmit the information. 'ou (now X
fa", or a hot list, or 5
; card, or electronic, whate0er,K e"/lained !ichard.

JAnd, once we ha0e these data, we can +egin to measure how long it ta(es
for the information to change hands and how often,K Ste0e said.
J!emem+er,K Paula /ointed out, Jit is e"tremel, im/ortant that we 0erif,
the data with the /rocess owners or those who wor( in the /rocess. Ma,+e
we should schedule a meeting ne"t Monda, with se0eral of the 2rst:line
su/er0isors E Ga(e and $en and /ossi+l, &at E to 0alidate what we 2nd.K
;igure 7</7 Material and Information ;lo- for 'ean Implementation
C"rrent State Ga)

77<
JThat sounds li(e a good idea to me. I will ma(e sure that the, will +e
a0aila+le earl, ne"t wee( to do that,K said !ichard.
As the 2rst grou/ was ma(ing /lans for the material and information
ma/, the mem+ers of the second grou/ were ma(ing similar /lans to ca/ture
the Le0el 4 and Le0el 7 SIPH data.
J)hat do ,ou thin( a+out starting with out/uts +, /roduct grou/ing,
identif,ing the a//ro/riate customers for those out/uts, and then documenting
the ste/s in the /rocess that generate those out/utsRK as(ed arl.
JThat sounds reasona+le to me,K said Gose/h. JThen we can list the su//liers
for the /rocess and record the in/uts.K
JI thin( I would do it the other wa, around,K argued Heather. JI would
identif, the in/uts that trigger the /rocess to +egin and then document those
su//liers who su//l, those in/uts.K
JI can li0e with doing it that wa,,K said Gose/h. JAs long as we get done
+, Se/tem+er 74.K
arl ga0e Gose/h a loo(. JHnce we ha0e Le0el 4 documented for the o0erall
o/erations /rocess, we can then +rea( out the le0el 7 su+/rocesses into their
s/eci2c acti0ities,K said arl.
;igure 7</: 'e(el 7: Supplier Interface
77=
JNee/ in mind there ma, +e se0eral Le0el 7 /rocess Lows. )e should
/ro+a+l, segregate the Lows +, customer interface, su//lier interface,
manufacturing,
and /roduction//lanning control. Also, remem+er that !o+ert
told us to limit the num+er of ste/s to +etween ? and 73, so as not to go too
dee/ into the /rocess.K
Heather continued, JI thin( if we a//roach our largest /roduct famil,
2rstXK
$, the +eginning of Se/tem+er, the two grou/s had made good /rogress
on each t,/e of /rocess ma/. The, documented all the maFor acti0ities,
ca/tured the information lin(ages, understood how /h,sical material was
trans/orted around the sho/, and recorded the time required for each /rocess
ste/ and the out/ut /erformance for each /roduct grou/ing. In addition,
the, had 0eri2ed this information with the /rocess owners and recei0ed +u,in
on the data. )hen Se/tem+er 74
arri0ed, it was time to +egin anal,sis of
the +aseline data.
In order to guide the decision /rocess used in determining C7D the
sequence and /riorit, for im/lementation, C3D which areas were in need of
the most hel/, and C5D Fusti2cation for additional e"/enditures, the /roFect
team needed to conduct a root cause anal,sis of the current o/erating
en0ironment.
!o+ert once again had the team +rea( u/ into two grou/s. The
2rst grou/, led +, arl, was to concentrate on the anal,sis of /roduction and
schedule loss. The second grou/, led +, Ste0e, was to address waste JmudaK
issues and elements anal,sis. These two grou/s were instructed to e"tract
data from their +aseline data+ase, /rocess ma/s, o+ser0ations, inter0iews,
mar(eting data, and the lean assessments to generate a clear /icture of where
wastes could +e found in the current o/eration, the associated causes of the
wastes, and their im/act on +usiness /erformance. .ach grou/ agreed to a
;:da, wor( window to com/lete these tas(s and e"/ected to 2nish on Se/tem+er
7<, after which the, would /resent their 2ndings to e"ecuti0e management
on Se/tem+er 37.
As arl, Paula, and !ichard headed for the war room to +egin /lotting
their ne"t mo0e, Paula as(ed arl if he had a clue as to how the, were going
to come u/ with this information. arl re/lied, JI ha0e +een mulling o0er
this one since !o+ert showed it to us during wee( two and I thin( I ha0e a
/lan. I want to determine a standard out/ut or scheduled amount for each
/roduct +ased on the /remise of ma(ing toda, what we need toda,. I then
want to e"tra/olate the data we re0iew this wee( on a monthl, +asis, and
then I want to com/are the data to the standard. The results are not intended
to +e additi0e, +ut rather show order of magnitude for the /ro+lems.K
J*id ,ou understand what he Fust saidRK !ichard as(ed Paula.
C"rrent State Ga)
775
JI heard him sa, he had a /lan, +ut after that I ha0enPt a clueYK e"claimed
Paula.
JLet me tr, again,K said arl. JIf I ha0e a /roduction area that is required
to /roduce 744 units /er da, to meet dail, customer demand, and the current
Vroll:through ,ieldP on that /rocess is @4W, then I ha0e a /roduction loss of
34 units /er da,, or 644 /er month if there are 34 wor(ing da,s in a month.
&ow, if that same /roduction area has un/lanned equi/ment downtime of
3 hours /er da,, that would translate to a /roduction loss of 3? units /er
da,, or ;34 /er month.K
JHow did ,ou 2gure thatRK as(ed !ichard.
J)ell, if we currentl, run on a one:shift o/eration of <.; hours /er shift,
that means we need to /roduce 75.5 units /er hour, which I got +, di0iding
744 +, <.;. Multi/l, that +, the 3:hour loss /er da, times 34 da,s /er month,
and ,ou get ;34 units lost /er month,K e"/lained arl. J!emem+er, I did not
sa, the num+ers were additi0e, Fust that the, re/resented order of magnitude.K
JH(a,, I guess I understand the /roduction loss, +ut what a+out this
schedule loss,K as(ed Paula.
JThat one too( a +it more wor(, +ut I thin( it could wor( li(e this,K said
arl. JThin( a+out the se0en (inds of waste VmudaP that !o+ert tal(ed a+out
during the lean manufacturing training. He tal(ed a+out waiting, tra0el,
dela,s, etc. These (inds of waste can signi2cantl, im/act an o/erator who is
su//osed to +e doing 0alue:added wor(. If I ha0e an o/erator who is idle 54
minutes waiting for /arts or has to s/end 34 minutes loo(ing for a for( truc(
to gather tooling for a setu/, that would +e a schedule time loss +ecause he
is not a+le to /erform 0alue:added wor(. -or e"am/le, if I determine that
an o/erator is s/ending 7.; hours /er da, chasing down tooling and his
/roduction area needs to /roduce 744 /arts /er da,, li(e +efore, then his
/otential schedule im/act could +e 75.5 /arts /er hour times 7.; hours /er
da,, which would +e a schedule loss of 34 /arts /er da,.K
JI see,K said !ichard. JSo, we would gather /rocess /erformance data
a+out each /roduction area and /rioritiIe the causes +ased on the magnitude
of the im/act.K
J."actl,,K said arl.
JI ho/e ,ou two (now what ,ou are doing,K sighed Paula.
As arlPs grou/ wor(ed their wa, through the data and +egan to categoriIe
the causes and magnitude of the wastes, the, +egan to disco0er some 0er,
interesting /erformance im/acts relati0e to the current o/eration. It was
through the gathering of the data and /lacing them in this format that the,
+egan to de0elo/ an a//reciation for Fust how much loss was ta(ing /lace
within the +usiness C-igure 75.5D.
77>
Ste0ePs grou/, on the other hand, did not +egin +, going to the war room.
Instead, the, went out to +rea(fast. Ste0e o1ered to treat them to +rea(fast
for a chance to get awa, to gather their thoughts and collecti0el, decide the
+est wa, to a//roach this ne"t tas(. JHow do ,ou two thin( we should tac(le
this ne"t assignmentRK inquired Ste0e.
$etween mouthfuls, Gose/h said, JI donPt care as long as we are done +,
-rida,.K
J'ou are a real stic(ler when it comes to schedules, arenPt ,ou, GoeRK
e"claimed Heather.
J)hat can I sa,R IPm an accountant,K e"claimed Gose/h. JI ha0e li0ed for
month:end closings all m, life. ItPs in m, +lood.K
JAre ,ou li(e this at homeRK as(ed Heather.
J'ou +et,K said Gose/h.
JHow does ,our wife stand itRK inquired Heather.
JAfter awhile, I +egin to grow on ,ou,K claimed Gose/h.
Heather ga0e u/. J)hat do ,ou thin(, Ste0eR How do ,ou thin( we should
/roceedRK as(ed Heather.
;igure 7</< Production 'oss

C"rrent State Ga)
776
JI guess I do not see this as +eing all that diUcult. As I thin( +ac( to
when !o+ert 2rst showed us the issue/element matri", it seems to me that
itPs a matter of identif,ing each of the current /roduction areas and listing
all of the /rominent issues in the area. I +elie0e we can gather enough
information from the data+ase to generate a su+stantial list of issues for each
area. After ha0ing identi2ed the +usiness issue a1ecting each area, itPs a matter
of categoriIing them according to the wastes that are contri+uting to those
issues C-igure 75.6D. -rom there, we will +e a+le to identif, which elements
are necessar, to 2" the +usiness o/eration /ro+lem we are e"/eriencing. How
does that sound to ,ou, GoeRK
JSounds 2ne to me, as long as we are done +, -rida,,K he said.
Heather and Ste0e Fust loo(ed at each other and shoo( their heads.
$, -rida,, Se/tem+er 7<, each of the grou/s had +een a+le to create
either a matri" or Pareto diagram +, /roduction area. The, were a+le to
then s/end the following Monda, and Tuesda, morning /ulling their e"ecuti0e
management de+rie2ng /resentation together. The /rimar, /ur/ose
;igure 7</= 'ean Manufacturing Issue0Element Matrix
77?
of the /resentation was to secure management agreement as to the magnitude
of the /ro+lem, to /ro0ide an understanding of the le0el of /otential
+ene2t a0aila+le, and to e"/lain where the le0erage /oints were to guide the
sequence for im/lementation. In addition, the team had created a quic(hit
list of short:term im/ro0ements that were disco0ered during the /roduction
and schedule loss anal,sis.
!o+ert (new this would +e the 2rst real, tangi+le loo( +, !egalPs e"ecuti0e
management at how large the ga/ was and how great the o//ortunit,. It also
was the 2rst /reliminar, 0iew into how much mone, the, ma, +e required
to s/end to ma(e this /rogram a success. The team recommended that the
to/ 20e /roduction loss areas +e targeted for NaiIen im/ro0ements immediatel,
as /art of the ne"t /hase. The /resentation was made Fointl, +, Ste0e
and Heather and was a great success. The /roFect team recei0ed a//ro0al to
ad0ance onward to /hase three E -uture State *esign.
;igure 7</5 Nuick3,it 'ist
77@
7=
;uture State
4esign
n )ednesda,, Se/tem+er 33,
$rian assem+led the team in the war
room and congratulated them on a Fo+ well done. He /ointed out
that the, had made tremendous /rogress to this /oint and were
right on schedule. J&ow that we ha0e come to an agreement as to where we
are, we can now +egin the Fourne, of designing where we want to +e. This
is where the fun startsYK
!o+ert then e"/lained to the /roFect team, JHur 2rst ste/ will +e to create
a conce/t design of the entire factor, Loor. )e will determine how /h,sical
material Lows +etween the new manufacturing cells. )e will generate a +loc(
la,out for the /lant. )e will anal,Ie /roduct demand +eha0iors and understand
the o0erall resource requirements for staUng and equi/ment.K
JHow long will this ta(eRK as(ed Gose/h.
JAccording to our original milestone /lan, we ha0e one wee(,K said
Heather.
JAfter anal,Iing the /art Low +etween /roduction areas, o+taining a
+etter understanding of /rocess 0ariation, and considering what we now
(now a+out the mar(et /lace e"/ectations, I +elie0e we should e"/and the
target com/letion to two wee(s,K stated !o+ert. J$rian and I ha0e alread,
had this discussion, and he agrees we should e"tend the deli0er, date in order
to get the Fo+ done right. )e ma, +e a+le to ma(e it u/ in detail design or
de2nitel, as /art of im/lementation. This /hase is e"tremel, im/ortant,
+ecause it sets the foundation and direction for the whole rest of the /rogram.
)ould e0er,one agreeRK
The grou/ as a whole nodded their heads in con2rmation.
7:A
JH(a,, then,K said !o+ert. JI would li(e to than( $rian for his words of
encouragement to the team and in the same +reath I would li(e to as( him
to lea0e so we can get some wor( done.K
$rian nodded his head and made his wa, to the door.
J&ow, what should we do 2rstRK as(ed !o+ert. JThe s/eci2c deli0era+les
for conce/t design include the num+er of cells required, an assessment of
demand +eha0ior, the new demand management /rocess, /lant load /ro2les,
staUng /roFections, +loc( la,outs, /roduct alignment to cells, im/lementation
logic, clari2cation of design criteria, a weighted decision matri" for
la,out o/tions, organiIation chart, +usiness cases for Fustif,ing e"/enditures,
and de2ned e"it criteria for each of the cells. *oes an,one want to recommend
an a//roachRK
JIf it were u/ to me, I would ma(e sure I had clari2cation on the design
criteria so I (new what we were designing the /rocess to achie0e,K said arl.
JThen I would want to understand m, /roduct demand +eha0ior so I understood
which /roducts were high 0s. low 0olume and what (ind of demand
0ariation I need to accommodate.K
JI agreeM that is an e"cellent starting /oint,K said !o+ert. J)hat ne"t,
!ichardRK
JI would ta(e a shot at aligning which /roducts could +e grou/ed into
which cells. I would consider aligning +, end customer, high 0olume, grou/
technolog,, common routing, material t,/e, etc. I would loo( at the di1erent
o/tions and select the a//roach that +est 2ts our design criteria,K o1ered
!ichard.
JI thin( those are the right items, +ut I would do them in the re0erse
order,K said Paula. JI thin( we should agree on the +est o/tions 2rst and then
allocate /roducts to cells. If we do that, then we can determine the num+er
of cells required, the resource load on each cell, and the staUng needed to
su//ort the cell.K
J-rom there we could de2ne our quantitati0e and qualitati0e e"it criteria
for each of the cells for the im/lementation audit,K declared Heather.
J$, then we should ha0e enough information to generate the +loc( la,out,K
said !ichard.
J-rom that /oint we can +egin considering the im/lementation logic,
de0elo/ an, +usiness case Fusti2cation required, and generate an o0erall
organiIation
conce/t, as we will ha0e a framewor( for the factor,,K said Gose/h.
JI li(e it,K said !o+ert. J!ecogniIe that, although some of these items can
+e done in /arallel, the 2rst few are reall, de/endent items and should +e
accom/lished 2rst. *oes an,one ha0e questionsR Then lets get started. I want
Heather and arlXK
%"t"re State 1esign
7:7
$, the end of the 2rst wee(, the /roFect team had com/leted all items u/
to and including the creation of a +loc( la,out C-igures 76.7 to 76.6D. As the,
a//roached the second wee(, a signi2cant amount of discussion ensued
around the im/lementation sequence and generation of an organiIation
conce/t.
;igure 7=/7 Product 4emand Be$a(ior
;igure 7=/: ption Selection Matrix
Z
7
3
5
6
;
?
<
@
4esign &riteria
Su//ort !egal, Inc., world:class
manufacturing 0ision
Su//ort runner, re/eater,
stranger strateg,
-acilitate lin(ages to customer
Su//ort sim/le materials Low
Increase ca/acit, Le"i+ilit,
UtiliIe wor(:cell a//roach
!educe non:0alue:added
s/ace
Pro0ide documented wor(
instructions
6.@
6.<
6.@
6.@
6.5
6.5
6.5
6.;
4.@
3.5
4.@
4.@
7.6
3.3
4.<
5.@
6.@
5.7
6.4
5.?
6.5
6.5
6.5
6.;
&riteria *eig$t
Fption 7G
;unctional 'ayout
Fption <G
By Product
Fption :G
By Product -it$
Stranger Area
=/?
=/6
=/A
=/?
=/<
=/<
=/<
=/5
7::
JXI donPt +elie0e we should start in the shi//ing area. I (now we are
ha0ing signi2cant through/ut loss in the /ress area due to un/lanned down
time on equi/ment,K declared arl. JI (now if we start there 2rst, we can
continue to gain more short:term +ene2ts.K
JI hear what ,ou are sa,ing, +ut if we selected the customer cell o/tion
Z3 for three of our assem+l, cells, then I thin( that is where we should +egin
in order to achie0e our o+Fecti0e of customer res/onsi0eness,K stated Ste0e.
JHh, ,ou Fust donPt want to deal with the 0endor deli0er, issues that would
arise if we started in the /ress area 2rst,K arl uttered sarcasticall,.
JThatPs not trueY )e found that our customers for housing and +earing
/roducts are most unha//, with our res/onsi0eness. )e also found that /art
of the reason it ta(es so long is the fact that com/leted /arts sit in /ac(aging
and shi//ing for 5 to 6 da,s +efore going out the door. If we can reduce that
time to Iero +, doing the /ac(aging right in the assem+l, area and sending
the /roduct directl, to shi//ing, we could most assuredl, meet our customersP
e"/ectations of ne"t:da, deli0er, on housing and +earing /roducts,K
declared Ste0e.
JH(a,, o(a,, settle down,K said !o+ert. JLetPs go +ac( to the reason wh,
we are doing lean in the 2rst /lace. )e ha0e had a customer lea0e the +usiness
due to lac( of res/onsi0eness. $, losing that 0olume, we ha0e /laced oursel0es
in a /osition that will erode o/erating /ro2t unless we reduce costs, namel,
;igure 7=/< &ell: Exit &riteria
Nuantitati(e
J Manufacturing lead3time: := $ours
J n3time deli(ery: @@O
J Nuality yield: @?O
Nualitati(e
J 5S $ousekeeping program
J &ell leader and team mem2ers
J &ommunication 2oard
J 4ocumented operating rules
J "raining skills matrix
J Posted performance measures
J *eekly -ork plan
J Sta2le Ban2an replenis$ment systems
%"t"re State 1esign
7:<
heads. )e are not in a sur0i0al mode ,et, +ut it is coming. I donPt thin( we
want to do an,thing that will /lace our su//l, chain at ris(. )e ha0e not
demonstrated we (now how to do lean oursel0esM therefore, we donPt ha0e
much e"/erience to stand on in addressing the current su//lier +ase with
lean requirements that we ha0e not demonstrated oursel0es. If we can continue
to use our su//l, +ase as it is currentl, /erforming and can minimiIe
ris( to the /roFect, I thin( those are im/ortant factors to consider. )e are
not losing mone,, cash Low is /ositi0e, and we are not as(ing to s/end a lot
of mone, to fund the /roFect at this /oint.K
!o+ert continued, J)hat we need is a 0isi+le winner and it needs to focus
on the e"ternal customer. I would agree with Ste0e. )e need to start in
assem+l, and ma(e that area sta+le. Then we can focus on a fa+rication area
that has signi2cant /roduction loss and deli0ers /arts to assem+l, along those
s/eci2c /roduct families and ma(e that sta+le. Then we can lin( the two
together using Nan+an. !ecogniIe that the fa+rication cell ma, 0er, well
ma(e /arts for other areas, too, +ut we can deal with that in detail design
and the transition /lan. )ould this initial sequence ma(e sense to e0er,oneRK
Most e0er,one nodded their heads in consensusM howe0er, full agreement
would ha0e to come later.
;igure 7=/= Before0After Block 'ayout
7:=
J&ow, what a+out this organiIation conce/tRK as(ed !o+ert. JIs the issue
whether we can come u/ with a /ro/osed organiIation for this lean o/eration
or whether we want to show a /ro/osed organiIation for this lean o/erationRK
JI ha0e had a concern for se0eral wee(s now a+out getting /eo/le engaged
in the /rocess,K said Heather. JI ha0e an issue with /u+lishing a /ro/osed
organiIation conce/t without ha0ing tal(ed with the /eo/le who are +eing
as(ed to change in the /rocess. )e ha0e not told them where the, 2t in. )e
ha0e not shown them how the, are going to +e a1ected. )e ha0e not answered
whatPs in it for them if the, /artici/ate in the /rocess. And, ,et, we are creating
a /ro/osed organiIation that ma, show them doing a di1erent Fo+ or show
them without a Fo+ altogether. I am uncomforta+le a+out doing that.K
JLet me tr, to e"/lain the reason wh, we would do this and how it should
+e done,K stated !o+ert. J-irst of all, the organiIation conce/t is to +e shared
at this stage with no one +ut this team and e"ecuti0e management. Second,
the organiIation conce/t is generic in that it /ortra,s what the 0arious roles
and res/onsi+ilities would +e at each le0el and area within the organiIation,
and the staUng num+ers would +e an end:state /roFection +ased on e"/ected
demand le0els and the designed staUng to su//ort the demand C-igure 76.;D.
)e need to understand what staUng le0els are required to su//ort the
+usiness in order to sustain required /ro2t le0els. &o one will lose their Fo+
as a result of the lean manufacturing /rogram. Howe0er, if demand falls o1
and we cannot re:de/lo, em/lo,ees to other 0alue:added or im/ro0ement
initiati0es, then a certain num+er will +e laid o1.K
!o+ert continued, J)e need to let e"ecuti0e management (now what
staUng le0el is required to sustain the lean manufacturing en0ironment and,
if we are currentl, sta1ed hea0,, we need to secure more wor( through
increased sales of e"isting /roducts, new /roducts, or new mar(ets. )e do
this +, arming mar(eting with a com/etiti0e ad0antage in the mar(et /lace,
so we can grow the +usiness. !emem+er, this information is o+0iousl, sensiti0e
and must +e (e/t under control.K
JI understand the need for the organiIation data, +ut when are we /lanning
to share it with the /eo/le +eing a1ectedRK as(ed Heather.
J9ood question,K arl said, as he win(ed at Heather. J)e ha0e +een going
at this for two months now and /eo/le are +eginning to get ner0ous. The,
are as(ing a+out what is going on. )h, the, ha0enPt heard an,thing, and
whether the, are going to li(e this /rogram.K
JHne of the areas we ha0e not focused on ,et is the 2nal /lant communication.
)e ha0e made the o/ening /resentation, we ha0e shown e0er,one the
milestone /lan, the, ha0e seen the /roFect charter, and the, (now when we
are e"/ected to /resent our 2ndings. )e ha0e +een /u+lishing the newsletter
%"t"re State 1esign
7:5
e0er, other wee(, and we ha0e +een res/onding to the issue +o" in order to
address indi0idual concerns as we go along,K stated !o+ert.
J)hat issue +o"RK as(ed Gose/h.
JThe one $rian told them would +e /ut in /lace and res/onded to on a
regular +asis.K
JHa0e we +een (ee/ing u/ with the em/lo,ee issues +o"RK as(ed !o+ert.
.0er,one loo(ed at each other. The, had forgotten to assign res/onsi+ilit,
for the issue +o". !ichard ran out to the Loor and found the +o" stu1ed full
of questions that had not +een res/onded to since da, one. He immediatel,
em/tied the +o" and +rought the stac( of /a/er into the grou/. The team
was dum+founded and immediatel, +egan cataloging the issues/suggestions
and documenting res/onses to the questions. $, a+out 74B44 that night the,
had a written res/onse to all the issues and suggestions and had them /osted
in multi/le locations on the sho/ Loor. In addition, the, di0ided u/ the sho/
and made /lans to 0isit the sho/ Loor the ne"t da, and tal( directl, with the
/eo/le and a/ologiIe for the /roFect teamPs mismanagement of the /rocess.
The ne"t morning, when the team 0isited the sho/ Loor, the maForit, of
them were greeted rather coldl, when the, inquired a+out the su+Fect. The,
were treated to such mutterings as J/rima donna,K Jout of touch,K Ji0or,
;igure 7=/5 rgani!ation &oncept
7:>
tower,K Jnot team /la,ers.K It too( the team a+out three hours to go around
and smooth o0er relations with those em/lo,ees most /otentiall, a1ected +,
the change initiati0e. After their encounter on the sho/ Loor, !o+ert gathered
the troo/s and re:o/ened the discussion a+out communication and the conce/t
of res/onsi+ilit,, accounta+ilit,, and authorit, C!AAD. JAs we tal(ed
a+out during the 2rst da,s of the /roFect, when ,ou set u/ /roFect deli0era+les
and ownershi/, !AA
!"st
+e esta+lished +, name for each deli0era+le in the
/roFect. If e0er,+od, has res/onsi+ilit,, then no+od, has res/onsi+ilit,. I
+elie0e we ha0e learned a 0alua+le lesson a+out clearl, stating accounta+ilit,,K
said !o+ert.
J&ow, letPs tal( a+out this communication /lan to +e de0elo/ed,K !o+ert
continued. Jontained in that /lan is to +e a stor, line that answers some
0er, s/eci2c questionsB C7D )h, are we changingR C3D )hat are we changingR
C5D )here are we nowR C6D )hatPs in it for meR At this /oint in the /roFect,
we cannot answer these questions. )e are getting closer to +eing a+le to
answer these questions, +ut we are not there ,et. Howe0er, +, the end of this
/hase, we will (now these answers and will /resent them in the /lant:wide
communication that is targeted at the end of this /hase.K
J*oes it ma(e sense to wait until we are three months into the /roFect
+efore we engage the /eo/le with this issueRK inquired Heather.
JI thin( it is a matter of (ee/ing with each /ersonPs role for the /roFect,K
said Ste0e. JThin( a+out it. )e ha0e +rought the /rocess owners in e0er,
ste/ of the wa, as we ha0e gone through each /hase of the /roFect. )e ha0e
gotten their in/ut and +u,:in on the 0alidit, of the data and not made
changes without their concurrence. )e ha0e not made an, changes to the
o/erational le0el ,et and wonPt until we +egin im/lementation with the
NaiIen e0ents. Hur sho/Loor o/erators ha0e not +een a1ected, and when
the, are, the, will +e designing their own wor( areas. )e will ha0e done
some of the u/:front anal,sis and ma, ha0e changed what /arts are made
where, +ut the, will +e in0ol0ed e0er, ste/ of the wa, when changes are made
in their areas on the sho/ Loor.K
JI hear what ,ou are sa,ing. I Fust want to ma(e sure we donPt lose sight
of the /eo/le, +ecause I +elie0e their acce/tance or reFection of this /roFect
could ha0e a maFor im/act on whether we are successful or not,K stated
Heather.
All the /eo/le in the room nodded their heads in agreement.
J9ood, now itPs time to +egin ste/ two E detail design,K said !o+ert.
JThe deli0era+les from this e1ort will feed directl, to the im/lementation
teams for the NaiIen e0ent. -or each of the cells, we will +e generating a ta(t
time, cell wor(load, equi/ment requirements, estimated resources, assigned
%"t"re State 1esign
7:6
/roduct mi", SIPH, cell design guidelines, and /otential measures. This
e1ort will sa0e us a tremendous amount of time during im/lementation.
*oes an,one ha0e a suggestion as to the +est wa, to get through thisR )e
currentl, ha0e identi2ed nine assem+l,, si" fa+rication, and three ser0ice cells
for a total of 7@ manufacturing cells.K
JI would recommend we s/lit the team +etween assem+l, and the rest,K
suggested arl. JI could lead the assem+l, team and !ichard could ta(e
fa+rication and ser0ice, since we gathered the data from those areas initiall,.K
JThat wor(s for me,K said !ichard.
JThatPs 2ne with me, as long as we are 2nished in two wee(s,K Paula said,
as she nudged Gose/h in the arm. The team +urst into laughter.
$ecause there were no o+Fections, the teams were o1 and running. The,
Fointl, created some of the tem/lates, so the information was /resented in a
uniform manner. The, ca/tured all the demand data in order toB
7. *e0elo/ a designed dail, /roduction rate for the ta(t time calculation.
3. 9enerate the dail, /roduct:mi" schedule required for the cells.
-rom there, the, generated a SIPH /rocess ma/ for each cell so that all
the /art num+ers for each cell had an identi2ed su//lier/customer and an,
s/ecial material handling or /rocessing requirements could +e identi2ed.
Hnce the, had the required ste/s in the /rocess documented, the teams
ca/tured the current wor( content for each o/eration for each /art num+er.
This allowed them to calculate ta(t time, rough out the equi/ment loads,
and to /roFect /otential staUng requirements for each of the cells C-igures
76.? to 76.=D.
In addition to conducting a /h,sical Low data anal,sis for the cells, the
teams de0elo/ed design guidelines for each cell, de2nitions for the /otential
measures at the cell le0el, and a /otential organiIation conce/t at the cell
le0el. The team s/ent e0er, +it of the ne"t two wee(s designing, calculating,
discussing, and de+ating the design of each of the cells. As the end of the
second wee( drew to a close, the /roFect team was +eginning to feel /rett,
good a+out what the, had de0elo/ed. An
es)rit &e cor)s
was +eginning to set
in. The, were +ecoming of one mind a+out the /roFect and generating real
e"citement a+out the u/coming im/lementation.
Hn -rida,, Hcto+er 7;, !o+ert +egan shifting the teamPs focus awa, from
the 0er, detailed, tactical le0el to a +roader, more strategic le0el. He told them,
J)e need to s/end the last two da,s de0elo/ing the transition strateg, and
im/lementation /lan for the /rogram. The transition strateg, should address
how we are going to im/lement the /rogram without shutting down the
7:?
+usiness. It should answer whether or not we are going to +uild /roduct ahead
of schedule in order to mo0e equi/ment and +u1er customer demand. Are
we mo0ing on the wee(endR )ill we utiliIe the NaiIen a//roachR )ill we use
/ush:and:/ull scheduling methodolog, in common resource areas for some
of the /arts or turn o0er the whole logistics s,stem at one timeR How will we
locate, identif,, count, and trac( in0entor, during the relocationR How do we
handle our initial e"cess in0entor, outside the Nan+an s,stemR In addition to
the transition strateg,, the im/lementation /lan needs to +e documented. It
needs to identif, the /ilot cell, which /roduction cells go second and third,
and which /roduct grou/s we are focusing on 2rst, second, and third, etc.K
CSee -igure 76.74.D
As the /roFect team wor(ed fe0erishl, to com/lete the tas( +, mid:wee(,
!o+ert was /re/aring the e"ecuti0e management team for the 2nal de+rie2ng
on -rida,. He ga0e them a /re0iew of what was coming and as(ed if there
was an,thing the, could thin( of that was of concern that the team should
loo( into +efore the meeting. .0er, manager said the, were quite /leased so
far with the /lanning e1ort, and the, were 0er, an"ious to +egin the
im/lementation
/hase after 73 wee(s of /lanning and anal,sis.
;igure 7=/> Product 4emand Analysis
;igure 7=/6 4esigned "akt "ime

%"t"re State 1esign

7:@
$, the time -rida,, Hcto+er 33, rolled around, the /roFect team had their
transition strateg, identi2ed, the, had their im/lementation /lan documented,
and the, had a /lant:wide communication /resentation all /re/ared
;igure 7=/? *ork &ontent Matrix
;igure 7=/@ +olume Matrix
;igure 7=/7A Implementation Met$odology
57?
34<
34<
73?
@5
@5
3=3
=44
53.6W
57?
7@?
7??
??@
<6.3W
3@6
7@?
7@?
?;<
<5.4W
7;@
736
@5
5?;
64.?W
=;
736
?3
3@7
57.3W
3;5
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;@6
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746
746
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75=4
=<5
@6=
5373
7<A
for e"ecuti0e management a//ro0al. The meeting with management lasted
a+out three hours, including lunch, and at the conclusion of the questionand:
answer session, $rian as(ed that the team +e dismissed for an hour while
the !egal e"ecuti0e management team contem/lated the /ro/osal.
)hile the team was waiting in the war room, Heather as(ed, J)h, do
,ou su//ose the, as(ed us to lea0eRK
JI donPt (now,K said Ste0e.
JMa,+e the, wanted to tal( a+out us +ehind our +ac(s,K said arl, Fo(ingl,.
JI thin( the, Fust want to ma(e us sweat,K said !ichard.
JI imagine the, Fust wanted to feel comforta+le as a grou/ that this is the
right direction and the, want to +e a+le to ha0e some free de+ate among
themsel0es, unencum+ered +, s/ectators,K said !o+ert.
After a+out 6; minutes, the, were in0ited to return to the conference
room. $rian welcomed them +ac( and congratulated them on a well:de0elo/ed
and thought:through lean manufacturing /ro/osal for !egal. His ne"t
comment was, JSo, when can ,ou startRK
7<7
75
4eployment
, the time @B44 a.m. )ednesda, morning, Hcto+er 3<, arri0ed, the
team mem+ers had alread, +een assem+led and were +usil, ma(ing
2nal arrangements for $rianPs /resentation to the entire em/lo,ee
/o/ulation of !egal, Inc. It was designed to +e a one:hour /resentation with
a half hour for questions and answers. The team was e"tremel, e"cited and
at the same time ner0ous a+out how the lean manufacturing message would
+e recei0ed +, the rest of the em/lo,ees.
Heather was most concerned a+out how the em/lo,ees who would +e
most a1ected +, the /rocess changes would feel a+out the /rogram. She (new
that no one would lose his or her Fo+ as a result of the lean manufacturing
/rogram. The, ma, +e doing di1erent Fo+s or conducting wor( in a di1erent
manner than the, were used to doing, +ut the, would not lose Fo+s as a result
of the continuous im/ro0ement e1orts. She (new the, had alread, identi2ed
a list of e"isting im/ro0ement initiati0es, which were not getting done due
to a lac( of resources. She (new a NaiIen /ool was +eing esta+lished for
/ersonnel who were released from current /roduction areas so that the,
could +e utiliIed on future NaiIen e0ents. She realiIed that !egal sorel,
needed /roduction engineers and technicians to wor( on the sho/ Loor and
with the su//lier +ase to address lean im/ro0ement o//ortunities. .0en
though she (new a+out all the outlets that had +een /ut in /lace, she was
still concerned as to how the /eo/le would handle the news. She went u/ to
arl, lightl, touched his forearm, and as(ed, Jarl, how do ,ou thin( the
/eo/le are going to recei0e the /resentationRK
arl turned to Heather and re/lied, JI wouldnPt +e too concerned a+out
it. )e ha0e set u/ se0eral new o//ortunities if their current /ositions are
+eing eliminated, and we ha0e assem+led a 0er, com/elling stor, as to wh,
the +usiness needs to change. )e ha0e shown where the, can 2t into the new
B
7<:
o/eration. )e ha0e demonstrated that when /eo/le are wor(ing on non0alue:
added acti0ities the, are wasting 0alua+le resource time and energ,.
)e ha0e made it clear that it is the /rocesses the, are doing that are non0alue:
added, and not the indi0idual /eo/le themsel0es who are non:0alueadded.
Unfortunatel,, I +elie0e what !o+ert told us is true, that 74W of the
em/lo,ees will em+race the change, @4W will go with the Low, and 74W will
2ght it all the wa,. I also thin( we need to address those 2ghters as earl, in
the /rocess as /ossi+le so the, do not ruin it for the +alance of the organiIation.
)e will need to let them (now that we are going in this new direction,
and if the, donPt want to change, we donPt thin( the, are going to +e ha//,
wor(ing here in the future. )e need to inform them that we will +e glad to
hel/ them 2nd a new /osition some/lace else. Ho/efull, at $lue IronYK
Heather ga0e arl a wide:e,ed loo(. He Fust ga0e her a win( and wal(ed
+ac( to the war room.
$, 74B44 a.m., the stage was set, the /odium equi//ed, the slides loaded,
and the crowd gathered for a town hall meeting. The management sta1 and
/roFect team wal(ed in and sat in the front of the room to answer questions
from the audience. $rianPs /resentation was direct, 0er, com/elling, and
sincerel, honest a+out the current situation and future direction for the
com/an,. He tal(ed a+out the /erformance ga/ +etween !egal toda, and the
+enchmar( of world:class manufacturers. He descri+ed the o//ortunities for
im/ro0ement that were identi2ed +, the /roFect team. He e"/lained the
im/lementation a//roach and the timing as to which areas were to +e
addressed 2rst, second, and third. He showed where !egal stood in the e,es
of its customers relati0e to com/etiti0e criteria and +, com/arison to the
com/etition. He reiterated that no Fo+s would +e lost due to the im/ro0ement
/rogram, +ut did e"/lain that man, would lose their Fo+s if there was a
reduction in demand for !egalPs current and future /roduct +ase. $rian
showed the list of unresourced im/ro0ement initiati0es that were a0aila+le
for those who were released from their current acti0ities within the o/eration.
He ended the /resentation with a than( ,ou to the /roFect team for their
e1orts o0er the /re0ious three months and as(ed for the full su//ort of e0er,
em/lo,ee at !egal during im/lementation.
Although, most of the audience was quiet at 2rst and did not 0olunteer
an, questions, the, did not a//ear to +e in shoc(, either. This was /rimaril,
due to the fact that the team had (e/t man, of the (e,, informal leaders on
the com/an, gra/e0ine informed as to what was ha//ening. The team had
also (e/t se0eral inLuential /eo/le in0ol0ed during the anal,sis, /lanning, and
design /hases in order to 0alidate data and gain concurrence on direction. The
questions, which e0entuall, came, were relati0el, tame and focused /rimaril,
1e)loy!ent
7<<
on understanding how indi0idual in/ut would +e incor/orated into their wor(
areas. $rianPs res/onse was that as each area was scheduled to come on line,
indi0idual in/uts would +e addressed during that /hase of the im/lementation.
)hen the /roFect team adFourned to the war room, the, were an"ious to
+egin this 2nal /hase of the /roFect. The, were e"cited to +egin seeing acti0it,
relati0e to all their /lanning e1orts. $, the time !o+ert made it +ac( to the
war room, he was /um/ed.
JH(a,,K he said. JIt is time for us to mo+iliIe oursel0es and (ic( o1 our
/ilot cell im/lementation. Here is how I +elie0e we should /roceed. -irst of
all, I want to +ring in the selected cell leader and his team of o/erators after
lunch and I want e0er,one to introduce themsel0es to the cell team mem+ers.
Second, I want to congratulate them on +eing selected for the /ilot and let
them (now that it is a good thing and not a +ad thing that the, ha0e +een
selected. Third, I want to +rief the cell team on what anal,sis has +een done
to this /oint in their area. -ourth, I want to inform them that the, ha0e +een
scheduled for a NaiIen e0ent +eginning ne"t Monda,. And, 2nall,, I want to
tal( through with them the NaiIen e0ent schedule and lean manufacturing
/rinci/les format.K
J*onPt ,ou thin( that that is a lot of information for them to digest in
such a short /eriod of timeRK as(ed !ichard. JAfter all, the, onl, recei0ed
their 2rst introduction to lean manufacturing a cou/le of hours ago.K
JI donPt thin( so,K said Paula. JI thin( these /eo/le ha0e +een an"ious to
hear information from us for the last three months and the, would +e glad
to hear as much as we can tell them.K
JI agree with Paula,K Gose/h chimed in. JAfter all, we had to a+sor+ a lot
of information in a short /eriod of time. I thin( it is time we share the fun
with someone else.K
The rest of the /roFect team nodded in agreement. The, felt the time had
come to immerse the rest of this organiIation in the world of lean manufacturing.
After lunch, the cell team entered the war room somewhat a//rehensi0el,.
!o+ert +egan +, introducing himself and as(ing them to ta(e a seat at the
ta+le. The /roFect team mem+ers introduced themsel0es, e"/lained their roles
on the /roFect, and congratulated the cell team mem+ers for +eing selected
as the /ilot cell. After setting the cell team at ease, Ste0e +egan the de+rie2ng
+, e"/laining the lean assessment results. He then wal(ed them through the
o0erall /lant material and information Low ma/. He then /roceeded to
descri+e the /roduction loss Pareto diagram and waste issues/element matri"
for their area. He 2nished +, descri+ing the conce/t design for the /lant and
showed where their /roduction area 2t into the o0erall la,out.
7<=
arl then stood and once again e"/lained the im/lementation methodolog,
to the team. He e"/lained how there would +e a 3:month stage in
which the +aseline and foundation of the cell would +e esta+lished. *uring
this /eriod of time, the team would +e e"/ected to im/lement se0eral
quanti2a+le
and quali2a+le as/ects of lean manufacturing within their cell. The,
would +e gi0en time for the /rocess to sta+iliIe, a//ro"imatel, ? wee(s. At
the end of those ? wee(s, the cell would +e audited. If it /assed the audit,
a//ro0al would +e gi0en to ad0ance to stage two of im/lementation. The
same criteria would still a//l, for +oth stage two and then stage three. As
lessons were learned +, the cell team, the, would +e noted and used for
insight during the de/lo,ment of su+sequent /roduction cells.
J)hat are these stages ,ou are tal(ing a+outRK as(ed Ga(e, the teamPs cell
leader.
JI am glad ,ou as(ed that question Ga(e, +ecause I am a+out to show
,ou,K said arl, as he hit the +utton for the ne"t slide.
JThe stage one /rinci/les are focused on designing a solid foundation for
the cell. The, are utiliIed li(e /rerequisites +efore mo0ing onto those items
in stage two. The, reall, set the stage, so to s/ea(.K CSee -igure 7;.7.D
JThe 2rst thing we ha0e to do is esta+lish ta(t time,K stated !ichard.
J.0er,thing starts with ta(t time, which is nothing more than the designed
dail, /roduction rate determined for the cell. )e are a+le to determine this
from our customerPs /roduct demand +eha0ior and the amount of 0ariation
;igure 75/7 'ean Manufacturing Principles
1e)loy!ent
7<5
we ha0e in that /attern. -rom there, we need to esta+lish our standard wor(.
)e accom/lish this through a series of ste/sB C7D ca/ture the current /rocess
Low, identif, 0alue: and non:0alued:added o/erations, and time each of the
ste/s in the /rocessM C3D eliminate or reduce the amount of non:0alued ste/s
or waste in the /rocess and lin( the 0alue:added /rocesses togetherM C5D
+alance the wor( load of each o/erator to the required ta(t timeM and C6D
document this as the standard method, sequence, and assignment of wor(
for o/erators in the cell.K
JHnce we ha0e an agreed u/on a standard wor( /rocess, we need to
identif, the com/onent /art Nan+an requirements and the new rules, roles,
and res/onsi+ilities for the cell team mem+ers,K e"/lained Heather. )e need
to determine the /arts and quantities and how the, are going to +e re/lenished
to the cell. In addition, we will documentB C7D the new o/erating rules
for the cell so e0er,one (nows how it is designed to function, C3D the roles
each /erson has as a team mem+er, and C5D the res/onsi+ilities each role is
accounta+le to /erform.K
JHnce we ha0e those /rinci/les, we can create the gra/hical wor( instructions
for the cell +ased on the new standard wor(,K said arl. J)e can then
decide what scheduling /attern we want to use to le0el /roduction through
the cell. )e loo( at high: and low:0olume demand /atterns, setu/ times, and
/rocess qualit, ,ields to determine the /roduction le0el. K
$, this time, !o+ert was +eginning to grin from ear to ear.
J)ith those /rinci/les in /lace, we can now demonstrate the one:/iece
Low methodolog, and intra:cell /ull conce/t,K said Ste0e. JHne:/iece Low
means that we no longer +uild in quantities of da,s or wee(s at a time. )e
+uild one /iece at a time and /ass it onto the ne"t o/eration without waiting
for the rest of the order to com/lete.K
J-inall, we esta+lish 0isual controls and ;S, or house(ee/ing, criteria for
the cell area,K said Paula. JThe 0isual controls consist of /erformance measures
on the sho/ Loor, for the sho/ Loor, created +, the sho/ Loor, maintained
+, the sho/ Loor, and owned +, the sho/ Loor. Hther 0isual controls
include well:mar(ed incoming and outgoing areas, signs descri+ing the cell,
and cell +oundaries /ainted on the Loor. The ;S conce/t is a well:organiIed
and structured wa, to loo( at house(ee/ing. .0er,thing has a /lace and
e0er,thing is in its /lace. .0er,thing that +elongs is la+eled, and the area is
cleaned on an e0er,da, +asis.K
!o+ert was s/eechless. His /roFect team had /ic(ed u/ on all the main
conce/ts from stage one, ta(en them to heart, and was now full, engaged in
this new world of lean manufacturing. The, had come a long wa, in the last
three months, and he was 0er, /roud of the transition the, had made. He
7<>
stood when Paula was 2nished and +egan to descri+e to the cell team the
NaiIen e0ent schedule C-igure 7;.3D. JThe NaiIen e0ent schedule ,ou now
see +efore ,ou will +egin on Monda,. The wa, it is designed to wor( is as
followsB
J*a, HneB In the morning, the cell team will recei0e 3 hours of training
on cell design and standard wor(. This training will /re/are ,our team for
the wor( ,ou will +egin on Monda,, which will +e focused on /lanning the
wee(, assigning res/onsi+ilities, re0iewing the detail design anal,sis, and
generating a /reliminar, la,out. At the end of the da,, the team will re0iew
their status.
J*a, TwoB The cell team will recei0e training on material /ull and one/iece
Low. )e are tr,ing to /ro0ide the training as ,ou need it and can a//l,
it. In addition, we are tr,ing to (ee/ it concise for ease of retention. Hn
Tuesda,, the 2nal la,out will +e designed, communicated to maintenance,
and rearranged. Again, at the end of the da,, the team will re0iew their status.
J*a, ThreeB ell team training continues on Nan+an requirements and
de2ning cell team rules, roles, and res/onsi+ilities. Hn )ednesda,, the cell
team will +e doing man, acti0ities in /arallel. 'ou will +e demonstrating the
material and o/erator Low for the new cell. 'ou will +e im/lementing the
;igure 75/: Bai!en E(ent
1e)loy!ent
7<6
one:/iece Low /rinci/le. 'ou will +e esta+lishing the Nan+an methodolog,
and disci/line for the re/lenishment /rocess. 'ou will +e documenting the
o/erating rules, identif,ing the di1erent cell roles, and descri+ing the
res/onsi+ilities
for each of the new roles. In addition, ,ou will ha0e selected the cell
Nan+an containers and +egun to /roduce /ilot /roduction. Again, at the end
of the da,, the team will u/date their status.
J*a, -ourB The cell team will recei0e training on le0el /roduction scheduling
and wor( instructions. 'ou will 2ll the selected Nan+an containers,
generate and descri+e how to maintain the gra/hic wor( instructions for the
new /rocess, and determine the le0el /roduction scheduling /attern for their
cell. Again, at the end of the da,, the team will re0iew their /rogress.
J*a, -i0eB The cell team will recei0e 2nal training on ;S and 0isual
controls. The team will use the ;S conce/t for house(ee/ing within the new
cell, de2ne the criteria for good house(ee/ing, and esta+lish the manner of
audit for house(ee/ing. In addition, ,ou will determine, design, de0elo/, and
de/lo, three to 20e critical /erformance measures for the cell. Two of the
recommended measures would +e some t,/e of scheduled out/ut adherence
and a measure related to /rocess qualit,. Again, at the end of the da,, the
team will u/date their status.
J$, the end of the wee(, the team should ha0e a functioning cell. It wonPt
+e /erfect and it ma, not e0en +e e"actl, the wa, ,ou reall, want itM therefore,
the following wee( is a0aila+le to ma(e changes and adFustments to get it the
wa, ,ou want it. $, the end of the second wee(, we should /rett, much ha0e
what we want and it is time to let the cell sta+iliIe. There will +e agreedu/on
/erformance targets for the cell and an e"it criteria esta+lished in order
to /erform an audit. After a+out ? wee(s, the cell should +e /erforming
consistentl, and ha0e satis2ed the e"it criteria. It is at this /oint that we will
discuss mo0ing on into stage two. Are there an, questions at this timeRK as(ed
!o+ert.
The cell team mem+ers loo(ed on with raised e,e+rows. The, were not
quite sure what to ma(e of all this information, let alone how all this was
going to +e accom/lished in 20e da,s. !ealiIing the grou/ was /ro+a+l, in
shoc(, !o+ert assured them, JI (now this is a lot of material, +ut the /roFect
team felt it was im/ortant to /ro0ide ,ou with a good o0er0iew +efore we
Fust ste//ed into it ne"t wee(. $elie0e me, it will all ma(e more sense as we
mo0e into ne"t wee(.K
As the following wee( /rogressed, Fust as !o+ert said, it all started to ma(e
sense. The /roFect team +egan each da, with a sni//et 0ersion of the training
to/ic for the da,. The, trac(ed themsel0es against the /roFect /lan the, had
de0elo/ed on Monda,. The /roFect team had sa0ed itself a lot of time +,
7<?
doing a thorough Fo+ during the detail design /hase +, determining the
demand /atterns, ta(t time, wor( content times, equi/ment loads, etc. All
this /re:wor( made getting into the detail la,out discussions with the cell
teams much easier. The fact that the maintenance resources were on stand+,
to rearrange equi/ment at the end of the second da, and actuall, got all the
equi/ment mo0ed +, the time the team arri0ed on )ednesda, morning +lew
the cell team awa,. $, the end of the da, Thursda,, the, were actuall,
/roducing at half rate and demonstrating the one:/iece Low conce/t. $, this
time, se0eral other !egal em/lo,ees were +ecoming interested in what was
ha//ening at this new cell area, and +, the end of the da, -rida,, when all
the equi/ment had +een /ainted, Loors had +een mar(ed and swe/t, and a
communication +oard was 0isi+le, the, wanted to (now when someone was
going to do their area.
As the /roFect team assem+led in the war room at the end of the long
wee(, $rian /o//ed his head in and told the team the, had done an outstanding
Fo+. He had to admit to them, JI wasnPt quite sure Fust how much
,ou reall, were going to accom/lish, +ut I must confess ,ou ha0e sur/assed
m, wildest e"/ectations. ongratulationsY Go+ well done.K
Gust as $rain was lea0ing, !o+ert arri0ed to tell the team how /roud he
was of all the, had accom/lished. J'ou, as a team, ha0e come together and
learned a great deal from each other. 'ou ha0e acquired (nowledge a+out the
current o/eration, ,ou ha0e a//lied what ,ou learned a+out lean manufacturing,
and now ,ou are transferring that (nowledge to others in the organiIation.
That is where true com/etiti0e ad0antage comes from. It doesnPt
come from +u,ing a new /iece of equi/ment. It doesnPt come from rearranging
the furniture. It doesnPt come from /utting in a Nan+an s,stem. It doesnPt
come from hiring an e"/ert in lean manufacturing. It comes from the
strengthening of ,our organiIationPs a+ilit, to res/ond to customer needs
through e0er,one within the o/eration.
JIts a+out equi//ing e0er,one with the (nowledge of how to +e lean and
a+out e0er,one wor(ing to im/ro0e the o/eration a little +it e0er, da,. 'ou
all ha0e done e"tremel, well u/ to this /oint, +ut Fust to this /oint.
Im/lementation
is where the ru++er meets the road, and ,ou ha0e onl, Fust +egun.
!emem+er, this is where we start to rea/ the +ene2ts for all our e1orts. &ow,
go home. 'ou deser0e this wee(end, +ut +e read, to hit it again on Monda,.K
7<@
7>
"$e Results
s the following wee(s and months /assed, the lean manufacturing
/rogram +egan to s/read across the entire o/eration. In a matter of
? months, the, were a+le to +ring eight cells u/ through stage one,
and si" of those cells also quali2ed through stage two. &one of the cells
attem/ted stage three. It was felt that stage three would +e addressed when
all the fa+rication, assem+l,, and ser0ice cells were functioning at a stage one
le0el. If the, (e/t to the original im/lementation schedule, all 7; cells would
+e functioning at stage two within one ,ear of their initial de/lo,ment.
&ot onl, were the cells satisf,ing the e"it criteria for qualitati0e as/ects
through 0isi+le e0idence of SM.*, TPM, ;S, standard wor(, Nan+an, etc., +ut
the, were also a1ecting the quantitati0e criteria through greatl, im/ro0ed
o/erational /erformance. The, were a//roaching +etween 3; and 5; turns
on wor( in /rocessM on:time deli0er, out/ut was consistentl, at =@W e0er,
da,M and the, achie0ed /redicta+le manufacturing lead:times for /roducts
that were measured in hours not wee(s. The in:/rocess qualit, ,ields were
relia+l, at the ==W le0el, and la+or /roducti0it, had increased a+out 7;W
across the +oard without changing an, of the current manufacturing /rocesses.
These changes in /erformance had generated tremendous enthusiasm
among the em/lo,ees. .0er,one could now 0isi+l, see the status of their areas.
The, (new if the, were on /lan for the da, or if /erformance was sli//ing.
The, were a+le to identif, /ro+lems on the communication +oard as the,
were ha//ening and ma(e issues 0isi+le. The teams were re0iewing their
o/erational /ro+lems with management on a dail, +asis for timel, correcti0e
action.
It was the culmination of all these indi0idual /rinci/les that allowed !egal,
Inc., to +egin addressing their identi2ed com/etiti0e criteria and to align
with what their customers 0alued. The, +egan to e"/loit their com/etiti0e
A
7=A
wea/ons in the mar(et/lace and challenge the com/etition, which in turn
was +eing reLected +, some changes in their +ottom line and the securing
of additional wor( that was not /lanned for the ,ear. urrent quarter sales
were shar/l, u/ o0er /lan, /rimaril, due to the securing of a new order for
high:/erformance /istons from #iscon om/an,. !egal went head to head
with $lue Iron and won a 3:,ear contract +ased on their res/onsi0e leadtime
and relia+le qualit, /erformance.
These successes would ha0e +een short li0ed and unsustaina+le if the /roFect
team had not realiIed how im/ortant it was to institutionaliIe the new wa,s
of wor(ing, there+, ma(ing it e"tremel, diUcult for the organiIation to sli/
+ac( into the old wa, of doing +usiness. The, (new that +, standardiIing the
wor( and ma(ing the o/erating /rocesses e"actl, the same, the, would remo0e
a source of 0ariation from the /rocess and enhance out/ut qualit,. Then, no
matter who did the Fo+, +, measuring the /rocess /erformance to a standard
for time and out/ut it was 0er, eas, to recogniIe a+normalities as the,
occurred. This allowed for greater control on the /rocess out/ut and timel,
feed+ac( for correcti0e action. -inall,, the, were astute enough to recogniIe
that rewards for the multi/le s(ills attained +, indi0iduals to su//ort the
Le"i+le wor( en0ironment were crucial, as were rewards for consistentl,
achie0ing and +eating /erformance targets. The, o1ered increased /a, for
increased s(ill and rewarded cell teams with /erformance +onuses on a
monthl, +asis if the, consistentl, achie0ed target and/or im/ro0ed the /rocess.
Instituting these changes allowed !egal to +ecome a world:class manufacturing
entit, o0er the ne"t cou/le of ,ears. The, had the tenacit, to sta,
the course and ride out the short:term /ains for long:term gains. Hnce the,
had their sho/ Loor under control, !egal had a wor(ing model for su//liers
to 0iew so the, could +egin to de/lo, similar methodologies within their
own factories. Man, of !egalPs (e, customer accounts were a+le to see a
signi2cant change within the o/eration and got a glim/se of where the
com/an, was going. This /ee( into the future im/ressed these (e, accounts
and hel/ed secure additional new /roduct orders in the future.
-or !egal Inc.B
A
onsistent
lea&ershi)
/ro0ided the direction and resources needed.
A
8nvolve!ent
of the entire !egal organiIation allowed them to succeed.
A
A lean
roa& !a)
hel/ed them sta, the course through roc(, terrain.
A
A /assionate
&esire
o0ercame all o+stacles along the wa,.
'ou, too, can +e successful on ,our /ath to +ecoming world class, Fust
li(e !egal. It is all Fust a matter of following the right ste/s.
I+
&ASE S".4IES
; 'EA1
MA1.;A&".RI1G
PRGRAMS
A14 PRME&"S
Part I# shows how si" di1erent com/anies de/lo,ed lean manufacturing
within their facilities Cthe names and /laces ha0e +een changed to /rotect
com/etiti0e con2dentialit,D. .ach case addresses a di1erent le0el or as/ect
of a lean im/lementation, +ut the, all follow the same outline in regard to
com/an, +ac(ground, dri0ers for change, the a//roach utiliIed, +ene2ts
achie0ed, and lessons learned. In addition, there are testimonials at the end
of each case that /ro0ide the reader with some insight into the /erce/tions
of em/lo,ees e"/eriencing this changeo0er to a lean en0ironment.
7=<
7>
&ase Study A:
perations
Redesign Program
&ompany Pro)le
ocated in an industrial /ar( within the cit, of GuareI, Me"ico, resides
a manufacturer of uninterru/ted /ower su//lies CUPSD for com/uters.
This manufacturer was /art of the
!a-"iia&ora
s,stem utiliIed +, man,
multinational com/anies as a source of low:cost la+or for /roducts. This
/articular facilit, was one of man, sites owned and o/erated +, a com/an,
called Unit, .lectronics. This /rimar, manufacturing location was contained
within a =4,444:square:foot facilit,, with a total em/lo,ee /o/ulation of
a+out @;4. Their (e, manufacturing /rocesses included the automated and
manual insertion of /rinted circuit +oards CP$sD and wa0e solder o/erations,
as well as manual and automated assem+l,.
Unit, .lectronics mar(eted, designed, manufactured, and deli0ered UPS
s,stems to the com/uter and communications industr, worldwide. The
Unit, .lectronics o/eration was di0ided into se0eral di1erent di0isions. The
di0ision that owned this /articular manufacturing site was Sil0er S,stems
9rou/ CSS9D. SS9 generated a//ro"imatel, a3;4 million in re0enues during
7==@ +, focusing on three maFor /roduct segments E stand+,, line interacti0e,
and online units. The GuareI, Me"ico, o/eration was accounta+le for
/roducing a//ro"imatel, one half of SS9Ps re0enue. The o0erall o/eration
was di0ided among three facilities located in GuareI, Me"icoM Horton Mesa,
T>M and .l Paso, T>.
'
7==
The original facilit, was +uilt when the initial com/an,, -aucet, was in
the low:0olume UPS +usiness. H0er time, the need arose to e"/and into an
adFacent +uilding to su//ort a growing demand for higher and higher /roduction
0olumes. The resulting im/act was an ine1ecti0e factor, Low and
insuUcient doc( s/ace to handle high:0olume UPS /roduction. a/acit,
constraints on equi/ment limited the a+ilit, to satisf, customer deli0er,
requirements and /ro0ide on:time shi/ments. The factor, had to o/erate 36
hours a da,, ? to < da,s a wee(, to meet customer requirements which did
not allow an, time for reco0er, or ma(eu/ /lans should there +e line sto//ages.
Ne, customers were also requiring additional ca/acit, and Le"i+ilit,,
which could not +e met. To remo0e some of the constraints, P$ assem+lies
were outsourced and /lans were made to transfer /roduction to other, higher
cost facilities within the grou/. Automated insertion CAID equi/ment was
running around the cloc( to (ee/ u/ with /roduction, which allowed for
onl, minimum scheduled maintenance. Aside from the factor,, there was a
54,444:square:foot warehouse facilit, in Horton Mesa, T>, which handled
all in+ound and out+ound material shi/ments. In addition, there was a
/eri/heral 75,444:square:foot material staging warehouse in GuareI to handle
the o0erLow of materials due to the ine1ecti0e Low through the /lant.
4ri(ers for &$ange
The o/erational /erformance of this manufacturing site had not +een satisfactor,
for se0eral end:item customers o0er a 5: to =:month /eriod of time.
In &o0em+er 7==<, Unit, .lectronics was /urchased from -aucet and internal
management consultants from the new /arent com/an, were sent to 0isit
the site to conduct an o/erations diagnostic on the .l Paso, Horton, and
GuareI facilities. The result of this diagnostic indicated se0eral issuesB
7. Unit, des/eratel, needed to get control of its demand management
/rocess.
3. The com/an, had a serious deli0er, /erformance /ro+lem C5;W ontime
to customer requested shi/ dateD.
5. In0entor, turns were around 3.@.
6. Su//lier management and de0elo/ment were reall, none"istent.
;. The limited ownershi/ for /roduct /erformance was scattered
throughout the organiIation.
7=5
?. The /lanning and control of material and information Low were
handled through two di1erent M!P s,stems. In addition, se0eral
informal +usiness rules were used to manage wor( /rioritiIation on
the sho/ Loor.
<. A limited num+er of sho/Loor metrics focused onl, on qualit,.
@. Man, informal 2"es were /ut in /lace without institutionaliIing the
im/ro0ements.
In addition, Interma", a /rimar, H.M worth a//ro"imatel, ;4W of Unit,Ps
+usiness, had recentl, come in and rated the qualit, s,stem of Unit, .lectronics
as 0er, /oor E Jone of our worst su//liers.K
)ith these identi2ed dri0ers for change, it is not diUcult to see what
moti0ated Unit, .lectronics to /ursue a new wa, of doing +usiness.
ProCect Background
$ased on the a+o0e 2ndings, an initial im/ro0ement e1ort was launched in
*ecem+er 7==@ and focused on su//l,:chain management. $, -e+ruar,
7===, it +ecame increasingl, o+0ious that signi2cant s,nergies could +e
gained for the +usiness if se0eral ongoing initiati0es could +e com+ined
under one /rogram. $, A/ril 7===, an Jo/erations redesignK /rogram
Cfocusing on lean manufacturing /rinci/lesD was launched which com+ined
a su//l,:chain management /roFect, a strategic /rocurement /roFect, and
a /lant e"/ansion /roFect into one o0erall /rogram.
The Unit, .lectronics Unit, H/erations !edesign CUH!D /rogram was
oUciall, (ic(ed o1 +, selecting a multi:disci/lined team to focus on redesigning
the 0alue stream for the entire o/erations /rocess. This team focused
on two main tas(sB C7D de0elo/ing an o0erall conce/tual design for the new
o/eration, and C3D generating a /roFect im/lementation /lan that signi2cantl,
im/ro0ed the com/an,Ps a+ilit, to satisf, all e"ternal customer and
internal +usiness e"/ectations. Throughout the /roFect, the /roFect team
recei0ed signi2cant training in +oth change management methodologies and
lean manufacturing techniques for o/erations management. In addition to
concentrating on the longer term /ers/ecti0e, short:term actions Cor quic(
hitsD were identi2ed, and im/ro0ements were incor/orated as quic(l, as
/ossi+le during the conce/t design /hase.
7=>
Unit, .lectronicsP UH! /rogram addressed the entire o/erations /rocess
from customer forecast and demand management through factor, Loor
management and scheduling to su//lier management and the distri+ution
of 2nished goods. It included their glo+al strategic /rocurement initiati0e
and too( ad0antage of the o//ortunit, to set u/ a Jgreen2eldK o/eration
within a +rand:new facilit, +ased on a +usiness unit a//roach.
The /rimar, /erformance o+Fecti0es were intended to a1ectB
A
C"sto!er re-"este& shi) &ate =CRS1>,
the com/an,Ps /erformance
measured against the date 2rst requested +, the customer when an
order is /laced. This is a measure of the entire /rocess of forecasting,
2nished goods/ser0ice le0el strateg,, and engineering and factor, /erformance.
A
C"sto!er )ro!ise &ate &eviation,
the com/an,Ps /erformance measured
against the 2rst /romise gi0en to a customer when an order is
/laced. The /romise date ma, not equal the !S*.
A
Man"*act"ring &elivery,
a measure of the a+ilit, of the factor, to +uild
and shi/ /roduct on its scheduled date.
A
Man"*act"ring lea&6ti!e,
the length of time from /rocurement of raw
materials to com/letion of 2nished goodsM also, the minimum length
of time from customer order to deli0er, of requested /roduct.
A
S"))lier )er*or!ance,
a measure of a su//lierPs a+ilit, to satisf, deli0er,,
qualit,, ser0ice, and cost e"/ectations.
A
8nventory levels an& t"rns =raw !aterials, work in )rocess, an& Cnishe&
goo&s>,
the annual cost of sales C/ast 5 months annualiIedD di0ided
+, month:end in0entor, le0els.
ProCect Approac$
As was stated earlier, the o0erall a//roach to the UH! /rogram actuall,
e0ol0ed o0er time. The /roFect initiall, +egan with a focus on the Unit,
.lectronics su//l, chain, from the customer to manufacturing /lanning and
control on the sho/ Loor to the deli0er, of 2nished goods to the customer
through warehouse distri+ution. After a few months of wor(ing on the
/roFect, it was determined that a greater amount of le0erage and su+sequent
+ene2t could +e achie0ed through the s,nerg, of se0eral /roFects, so the entire
7=6
/roFect was +roadened to co0er all of o/erations and /laced under one
/rogram management structure. This new sco/e co0ered e0er,thing from
order administration and su//lier interface to manufacturing management
and customer interface.
The o0erall /rogram was s/lit into se0eral indi0idual /roFects, which were
all interconnected 0ia a common /ur/ose through s/eci2call, identi2ed
o+Fecti0es. The /roFects were segregated +, maFor +usiness /rocess to /ro0ide
focus for the indi0idual teams and their assigned o+Fecti0es. .ach /roFect had
an identi2ed leader with assigned team mem+ers. The /roFects were time
/hased so that the team mem+ers who were assigned to initial /roFects could
+e reassigned to later /roFects. $, assigning resources in this manner, Unit,
was a+le to achie0e cross:functional (nowledge transfer through e"/osure
across /roFect teams.
The indi0idual /roFects includedB
7.
Process layo"t+
As/ects dealing with the /h,sical Low, cell design, and
2nal la,out for each of the cells C73D and +usiness units C6D.
3.
Material )lanning an& control+
-ocus on the design and de0elo/ment
of the logistics /rocess for /lanning and controlling the Low of material
through the factor, and warehouse s,stem to the customer
through Nan+an /ull.
5.
2rgani3ation &esign+
HrganiIation redesign and training /rograms
that included the cell team, cell leaders, +usiness unit managers, and
su//ort o/erations through a structured /rocess of assessment and
selection.
6.
%acilities
Cthe new /lantDB onstruction of a +rand:new manufacturing
facilit,.
;.
Tactical )roc"re!ent+
*e/lo,ment of shared .*I with su//liers
through .*I/e:commerce, and reduction of the current su//l, +ase
+, 64W.
?.
Total ac-"isition cost+
9eneration of a glo+al su//l, strateg, and
su//lier de0elo/ment and selection /rocess.
.ach /roFect had its own su+set of o+Fecti0es and assigned deli0era+les, and
each team had to re/ort /rogress to /lan for their /roFect e0er, wee(.
Integration
+etween the /roFect team leaders in regard to what the, were designing
for the new /rocesses was essentialM therefore, communication +etween
teams was a constant acti0it,.
7=?
.0en though each /roFect was managed inde/endentl,, the, all had to
follow the same methodolog, for design, de0elo/ment, and im/lementation.
This methodolog, had se0en distinctl, inde/endent ste/sB
7.
Baseline
would esta+lish a +aseline of current /erformance for the
e"isting /rocesses. This was accom/lished +, ma//ing each of the
critical o/erational /rocesses and gathering (e, /erformance data on
each of those /rocesses.
3.
1esire& state
would esta+lish the desired state for the +usiness. The
team did this +, re0iewing the o/erations diagnostic that was conducted
in *ecem+er of 7==<. The, also /erformed a self:assessment
on (e, +usiness /rocesses to determine where Unit, .lectronics was
/erforming com/ared to what was considered +est /ractice. The,
made site 0isits to other com/anies who were noted for o/erating
with lean /ractices. The e"/ected outcome of this ste/ was for the
/roFect team to recogniIe what was /ossi+le and to learn from the
techniques of others.
5.
Ga) analysis
would recogniIe the ga/ +etween where the, were and
where the, wanted to +e. An anal,sis was /erformed to understand
the ga/ and identif, actions to close it.
6.
Conce)t &esign
would /ro0ide a high:le0el conce/t 0iew of the
desired state for Unit, .lectronics, or a future state 0ision for what
the /roFect team collecti0el, agreed the, wanted success to loo( li(e.
It included deli0era+les such as +loc( la,outs, determining the num+er
of cells, what /roducts are made in the cells, num+er of +usiness
units, etc.
;.
1etaile& &esign
would /ro0ide a detailed 0iew of the future state. It
descri+ed all those elements that ma(e the future state a realit, and
included deli0era+les such as cell equi/ment requirements, equi/ment
loads, Nan+an siIes, staUng needs, o/erating rules, material
/lanning and control /rocess at the cell le0el, cell team mem+er roles
and res/onsi+ilities, etc.
?.
8!)le!entation )lan
would de0elo/ an im/lementation /lan and
include the time frame, identi2ed deli0era+les, assigned ownershi/,
transition strateg,, and sequence of e0ents to ma(e the future state a
realit,.
<.
0ec"tion
actuall, would de/lo, the im/lementation /lan.
7=@
As each indi0idual /roFectPs team anal,Ied and designed their im/ro0ements,
the, were required to recei0e a//ro0al at each ste/ +efore mo0ing on
to su+sequent ste/s. This ensured control of the /rogram. It (e/t the steering
committee engaged in the /roFect and made sure that the, +ought into the
design solutions +efore going too far with an una//ro0ed design. It also
enhanced integration +etween the /roFects +ecause the steering committee
was made u/ of cross:functional managers co0ering all as/ects of the +usiness.
Therefore, the, were the o+Fecti0e third:/art, 0iew that loo(ed at the
solutions from an outside /ers/ecti0e.
)hen it came time for im/lementation, the /rocess owners Cthose who
had to li0e with the new /rocess after the /roFect was o0erD were in the dri0erPs
seat for de/lo,ment. The design team was to still remain assigned to the
/roFect until the /rocess owner agreed the new /rocess wor(ed and was doing
what it was designed to do.
The one o0erriding strateg, was to /ro0e out the mechanics of the new
/rocess in the old facilit,. )hen the new o/erational /rocess for the 2rst
+usiness unit was sta+le, then it would relocate to the new facilit,, there+,
minimiIing ris( and a0oiding a dou+le mo0e of equi/ment.
."ecution of the im/lementation /lan had a few (e, as/ects worth notingB
7. The res/onsi+ilit, for e"ecution was handed o0er to the indi0iduals
who had ownershi/ for the new /rocess after im/lementation, there+,
requiring +u,:in to the new design +efore de/lo,ment. This reduced
the +urden of ha0ing to JsellK the new design to those on the sho/
Loor.
3. A /ilot cell a//roach was used, +, which the im/lementation initiall,
concentrated on one manufacturing cell, gathered all the lessons
learned from that cell, and then carried those onto the ne"t manufacturing
cell. This minimiIed ris( to the /roFect and allowed the
/roFect teams to collecti0el, concentrate their energies on one /ilot
cell during the learning stages of im/lementation.
5. $usiness units were de/lo,ed one +, one in accordance with the
manufacturing cells the, su//orted. This allowedB C7D the organiIation
changes to ta(e /lace +ased around a s/eci2c /roduct famil,,
and C3D ownershi/ for all the o/erational /rocesses that a1ected that
famil, to +e quic(l, ado/ted. This in turn accelerated the arri0al of
+ene2ts at the +ottom line for that gi0en /roduct famil,.
75A
ProCect "ime 'ine
"ec$ni%ues .tili!ed
1ate Milestone
*ecem+er 7==< Su//l, chain /roFect launched
-e+ruar, 7==@ UH! /rogram detail s/eci2cation
March 7==@ UH! /roFect team mo+iliIed
Gune 7==@ Material /lanning/control design a//ro0ed
Gul, 7==@ Pilot cell detail design a//ro0ed
August 7==@ urrent +aseline /rocess com/leted
Se/tem+er 7==@ Pilot +usiness unit design a//ro0ed
Hcto+er 7==@ 9lo+al su//l, chain strateg, a//ro0ed
&o0em+er 7==@ -irst cell goes li0e
*ecem+er 7==@ -irst cell e"it criteria satis2ed
Ganuar, 7=== -irst +usiness unit goes li0e
A/ril 7=== &ew /lant comes on line
Program and /roFect
management
harter, milestone /lan, haIards, issue log,
/rotocol, /roFect organiIation, /roFect 2le,
ris( assessment, detail schedule, deli0era+les,
control mechanisms
hange management ommunication /lanning, reaction to change,
resistors
Lean manufacturing
C-i0e Primar,
.lementsD
sho/Loor metrics, ser0ice cell agreements,
mi":model manufacturing, P/S anal,sis,
/roFect:focused management, continuous
im/ro0ement, routing anal,sis
$usiness /rocess
redesign
$aseline /erformance, ga/ anal,sis, future
state, conce/t design, detail design,
im/lementation /lanning, transition strateg,
Process 0alue anal,sis Su//lier:in/ut:/rocess:out/ut:customer
ma//ing CSIPHD
757
Bene)ts Ac$ie(ed
'essons 'earned
A
Adhere to and constantl, monitor meeting times and /roFect deli0era+les.
If a deli0era+le is going to +e missed, immediatel, address
the issue and de0elo/ a reco0er, game /lan. In this /articular case, it
should +e noted that the Me"ican culture was not attuned to e"act
time frames and s/eci2c scheduled commitments.
A
*o not assume a grou/ understands terms +eing usedM rather, 0erif,
that the, do understand the terms +eing used. CommunicationY
ommunicationY ommunicationYD Se0eral terms such as
tea!
and
5anban
were new to this culture.
A
*ri0e to detail as earl, as /ossi+le in the /roFect to assure (nowledge
transfer. If the /roFect team can de0elo/ the detail schedule, with the
a//ro/riate deli0era+les, in the correct sequence, the, are demonstrating
understanding. This /re:/lanning is critical when it comes
time to in0ol0e other resources outside the /roFect team Ce.g., /rocess
owners, s/ecialistsD for scheduling meetings, 0erif,ing information,
and discussing design o/tions.
4eli(ery Performance F&RS4G
GH@D =Pre6.2R>
=I>
As o* EH@@
=I>
Target
=I>
!unner /roducts 6@ =@ ==
!e/eater /roducts 6? =< =<
Stranger /roducts 67 =4 =4
Manufacturing 'ead3"ime
GH@D =Pre6.2R>
=ho"rs>
As o* EH@@
=ho"rs>
Target
=ho"rs>
!unner /roducts 37 7? 77
!e/eater /roducts 54 34 7;
Stranger /roducts ;4 35 3;
GH@D =Pre6.2R>
=I>
As o* EH@@
=I>
Target
=I>
Producti(ity
?< << @6
GH@D =Pre6.2R>
=&ays>
As o* EH@@
=&ays>
Target
=&ays>
In(entory
7@4 74? ?4
75:
A
UtiliIe /roFect leader integration meetings to ensure that cross:functional
team issues are +eing addressed and communicated. *e/ending
on the /roFect, this should ta(e /lace at a minimum of once /er
wee(. This as/ect is critical when multi/le initiati0es are +eing underta(en
simultaneousl,.
A
*e0elo/ and roll out the communication /lan earl, in the /rocess to
a0oid e"cessi0e rumors and s/eculation. .m/lo,ees need to +e
informed that a new /roFect is underwa,, wh, it is +eing done, and
how the, are +eing a1ected.
A
!ecogniIe indi0idual ca/a+ilities and limitations when assigning
/roFect roles. *o not o0erestimate the a+ilities of indi0iduals +ased
on their enthusiasm for the /roFect. #erif, that the, ha0e +een allocated
the time for their acti0ities and ha0e the e"/ertise to do the Fo+.
A
Ma(e sure /roFect /rotocols and /roFect 2les are utiliIed religiousl,
throughout the /roFect life c,cle. The /roFect 2le is the J+i+leK for the
/roFect. It contains the /roFect status, issues, game /lan, and e0idence
of /rogress. At the end of the /roFect, it /ro0ides a guideline for the
ne"t team that has to im/lement a similar initiati0e.
A
*ocument /roFect roles and res/onsi+ilities earl, in the /roFect. Ma(e
it 0er, clear who has ownershi/ for what at the 0er, +eginning of the
/roFect. Lea0e no gra, areas or e"tensi0e o0erla/ of accounta+ilities.
This will sa0e a lot of headaches later in the /roFect.
A
UtiliIe J$el+inK /ro2les for insight whene0er /ossi+le. Meredith $el+inPs
team role /ro2les /ro0ide 0alua+le insight a+out the ma(eu/ of
a team and the /ro+a+ilit, of success. Ta(e ad0antage of this insight
whene0er /ossi+le.
A
!equire full:time team mem+ers during the design and anal,sis /hase.
Part:time teams will onl, +e a+le to gi0e /art:time results. )hen a
/roFect team has onl, 34W of its team mem+ersP time, it is 0er, diUcult
to maintain team continuit, and focus o0er the life of the /roFect.
A
.nlist /rocess owner +u,:in to the new redesigned /rocesses. Process
owners should +e gi0en res/onsi+ilit,, accounta+ilit,, and authorit,
C!AAD for im/lementation whene0er /ossi+le. The, will own the
/rocess after the /roFect is com/lete and therefore must agree with
the new design. The, must acce/t ownershi/ for the designM therefore,
the, should +e intimate with its de/lo,ment.
A
oordinate rollout of the /roFect with to/ management a//ro0al. To/
management has ultimate res/onsi+ilit, for what ha//ens at the /lant
and therefore should a//ro0e maFor changes to the +usiness /rocess
that are under their control.
75<
A
Train all em/lo,ees who will +e in0ol0ed in the /roFect, not Fust the
design team. Process owners need to (now how the /roFect is +eing
managed, where the, 2t in, and the o0erall direction and /hiloso/h,
relati0e to lean management.
"estimonials
J-rom the 2rst diagnostic to the end of the /roFect, it was the stead,
/ressure, honest,, and /rofessionalism of all the teams that deli0ered
success. The constant feed+ac( reall, hel/ed (ee/ us on the right /ath.K
B'ice Presi&ent, 2)erations
J$, reorganiIing the
entire
Me"ico H/erations organiIation into cell
manufacturing +ased +usiness units, we e"/ect to see the following measura+le
resultsB
J7. Producti0it, im/ro0ementsB reduced direct head:count requirements,
e"tensi0e training /rograms and IP /rograms.
J3. Increased manufacturing Le"i+ilit,, the nature of cell manufacturingM
we will also +e hea0il, cross:trained at the cell and su//ort
team mem+er le0els.
J5. Management +, o+Fecti0eB 0irtuall, e0er, de/artment in the facilit,
has +een tas(ed to de0elo/ /erformance metrics +, which to
assess their /erformance, including the +usiness units.
J6. !eduction in the cost of qualit,B we ha0e im/lemented /rogressi0e
ins/ection through/ut the /lant, reducing the num+er of
ins/ectors.
J;. Im/ro0ed health and safet,B the focus on cell ownershi/ along
with ;S training will im/ro0e the sho/ organiIation as well as
/lant cleanliness.
J?. To mo0e from +eing one of Interma"Ps lowest rated su//liers to
one of the +est in less than one ,ear.K
B1irector Plant 2)erations
JTa(ing a signi2cant ste/ forward in the /rogram//roFect management
/rocess accom/lished a num+er of /ositi0e initiati0esB
J7. lari2ed the roles and res/onsi+ilities of the management, teams,
and /artici/ants.
75=
J3. Set forth a standard set of o/erating rules for all the teams to
follow.
J5. Pro0ided a message to all of management that the standard /rocesses
will +e em+raced.
J6. Pro0ided a team structure that a1ords accounta+ilit, for its mem+ers
and leadershi/.K
BProgra! Manager
JUnit, made signi2cant im/ro0ements in their o0erall qualit, and manufacturing
/rocess. XThe score of <? on this new sur0e,, as com/ared
to sur0e, scores of ?; in A/ril 7==@ and ;5 in *ecem+er 7==<, X is one
of the +est scores in the shortest /eriod of time among Interma"
su//liers.K
B8nter!a0 :"ality Syste! A"&itor
755
7>
&ase Study B:
Bai!en E(ent3Based
'ean Program
&ompany Pro)le
he headquarters for )interton or/oration, a a7.; +illion a ,ear /roducer
of industrial /roducts, are located a+out 74 miles west of the
le0eland downtown cit, limits. )interton was /rimaril, segregated
into three o/erating di0isions, a centraliIed sales/distri+ution o/eration, and
an inde/endent research and de0elo/ment facilit,. The cor/oration managed
5@ indi0idual manufacturing facilities C3< in the U.S. and 77 internationall,D.
The, em/lo,ed a//ro"imatel, 77,<44 /eo/le and utiliIed se0eral inde/endent
distri+utors to su//l, their 0arious /roduct lines to the mar(et/lace.
These lines included /roducts such as +all+earings, industrial a//lication
chain, cou/lings, electrical/mechanical com/onents, seals, con0e,or trac(,
gears, motors, and hoists.
The )interton +rand name goes +ac( o0er 744 ,ears. The, ha0e the re/utation
of /ro0iding a qualit, /roduct that lasts. The, had +een a+le to +uild
a strong mar(et /resence in &orth America o0er the ,ears throughB C7D good
+rand:name equit,, and C3D acquisition of other +usinesses. These two elements
allowed them to grow into a siIa+le organiIationM howe0er, as time
/assed, the mar(et/lace changed and foreign com/etition +egan to erode a
signi2cant share of their mar(et. Since )interton or/., as a whole, had +een
o/erating in a 0er, mature industr,, their introduction of new /roducts to
su//ort organic growth had +een limited o0er the ,ears. The, su//orted their
"
75>
/rimar, customer +ase through a 2nished:goods distri+ution warehouse s,stem
which was good from a res/onsi0eness stand/oint when /roduct was on
the shelf, +ut it required a signi2cant in0estment in in0entor, to maintain.
4ri(ers for &$ange
)interton or/. was not the dominant com/etitor in man, of the mar(ets
it ser0ed. Although some of the indi0idual sites were /erforming quite well
from a 2nancial /ers/ecti0e Ccash Low, /ro2t margins, return on sales, etc.D,
o0erall the, were e"/eriencing /ro+lems from an o/erational /ers/ecti0e.
Se0eral of the com/anies were ha0ing trou+le (ee/ing their full /roduct
lines in stoc( on the warehouse shel0es within the distri+ution centers.
$ecause man, of these com/anies had +een una+le to lin( u/ with H.Ms
for new /roduct introductions, man, of their /roducts were at the end of
their /roduct life c,cles and com/eting almost entirel, on /rice Csimilar to
a commodit, /roductD. The organiIation design, manufacturing architecture,
and material Low methodologies were struggling to satisf, new e"/ectations
for o/erational /erformance.
The maForit, of the o/erations were managing all their /roducts as J+atch
and queueK through manufacturing resource /lanning CM!P IID. All /roducts
were scheduled with the same /lanning and control /rocess regardless
of their /roduct demand +eha0ior. a/acit, /lanning was not utiliIed well
as a management tool, and /roduction orders were usuall, launched to the
sho/ Loor and ca/acit, constraints reconciled at that time. It was not
uncommon to 2nd the master /roduction schedule CMPSD managed 0ia sales
dollars rather than +, /roduction unit.
#isi+ilit, on the sho/ Loor in regard to /erformance to /lan for deli0er,,
qualit,, in0entor, turns, c,cle time, equi/ment downtime, /roducti0it,, etc.
was not clearl, e0ident. There was limited tie:in +etween sho/Loor acti0ities
and o0erall +usiness o+Fecti0es. It was diUcult to see where em/lo,ees were
engaged in the o/eration of the +usiness, due to the lac( of feed+ac( as to
how the, were /erforming. In res/onse to the need for the entire )interton
organiIation to +e com/etiti0e, a signi2cant change in the wa, the
manufacturing
sites were +eing managed was +eginning to e0ol0e.
ProCect Background
In &o0em+er 7==@, )intertonPs /arent com/an, merged with a second
com/ara+le
o/eration. This second o/eration had s/ent se0eral ,ears im/lementing
756
lean manufacturing across most of its com/anies. Man, of these com/anies
had +een following an a//roach that de/lo,ed lean manufacturing strictl,
0ia a series of NaiIen e0ents or J+litIes.K After se0eral ,ears of conducting
NaiIens in manufacturing, it had +ecome e0ident to these com/anies that
man, of the lean techniques used +, the sho/ Loor were a//lica+le to
administrati0e
en0ironments as wellM therefore, the, e"/anded the /rogram to co0er
the entire +usiness o/eration. This strategic initiati0e +ecame (nown as Jlean
enter/rise.K
-ollowing the merger, the new /arent com/an, e"/ected each of its di0isions
and com/anies to ado/t the im/lementation of lean manufacturing
within their facilities. )hen it came time for )interton to +egin its lean
/rogram, the, ado/ted the NaiIen e0ent:+ased a//roach. In addition, the,
su//lemented the NaiIen e0ent:+ased a//roach with the utiliIation of a 6:
da, lean class to enhance (nowledge transfer to the wor(force. This 6:da,
lean class was designed for those who alread, had attended an e0ent in order
to reinforce those to/ics co0ered during the NaiIen e0ent. This cor/oratewide
/roFect was launched with an initial /ilot de/lo,ment at two )interton
com/anies in A/ril 7===.
)interton or/oration initiall, targeted 35 com/anies in &orth America for
the ado/tion of lean manufacturing, with a time frame for im/lementation
of A/ril 7=== through *ecem+er 7===. The com/anies were identi2ed,
selected, and di0ided u/ +etween se0eral internal management consultants
who had /re0ious (nowledge of lean manufacturing conce/ts to su//ort the
rollout of the lean enter/rise /rogram. The lean NaiIen e0ents and 6:da, lean
classes were scheduled and attendees in0ited.
There were two /rimar, o+Fecti0es for the /rogram. The 2rst was to
conduct at least one NaiIen e0ent at each of the 35 sites in order to introduce
the organiIations to the lean conce/ts and de0elo/ NaiIen e0ent leaders. The
second was to e"/ose as man, em/lo,ees as /ossi+le to the 6:da, lean class
+efore the end of *ecem+er 7===. The lean class target audience included
/lant managers, manufacturing managers, +u,ers, schedulers, /roduction
engineers, and 2rst:line su/er0isors.
The o0erall intent was to Fum/ start )intertonPs mo0e toward lean, to
educate as man, /eo/le as /ossi+le a+out lean tools and techniques, and to
demonstrate an im/ro0ement in o/erational /erformance through NaiIen
e0ent /roFects as soon as /ossi+le.
75?
ProCect Approac$
$eginning in A/ril 7===, com/anies +egan hosting the NaiIen e0ents at their
indi0idual facilities and in0ited attendees from other )interton facilities to
/artici/ate in the e0ents. The e0ents were intended to last 6 da,s and usuall,
concentrated on four se/arate /roFects, t,/icall, three /rocesses from the
sho/ Loor and one administrati0e /rocess. .ach /roFect had a cross:functional
team of @ to 73 /eo/le assigned to it. The strateg, was for these e0ents
to +e utiliIed as s/ring+oards of lean acti0it, within the o/erations. Hnce a
com/an, had conducted a NaiIen e0ent, the, were to continue following u/
with other e0ents as needed to 2nd waste in the +usiness and continuall,
im/ro0e the o/eration.
T,/icall, an e0ent lasted 5 to ; da,s, de/ending on /roFect sco/e, o+Fecti0es,
and whether the site had /re0ious e"/erience with NaiIen. The 2rst
da, consisted totall, of training and education. It was a mi"ture of lecture,
e"ercises, discussions, and simulations. The training addressed multi/le lean
manufacturing to/ics Ce.g., one:/iece Low, Nan+an, 0isual management,
measures, etc.D. The second and third da,s were the actual NaiIen e0ent itself,
during which the teamsB C7D +aselined the e"isting /rocessM C3D designed a
new /rocessM C5D demonstrated the new /rocess, including the rearrangement
of equi/mentM and C6D re:+aselined the new /rocess. Hn the fourth da,, the
teams re0iewed their successes and de0elo/ed a follow:u/ strateg, for an,
remaining Jto doK actions.
$efore the e0ent, there was some initial discussion with the com/an,
/resident a+out the current state of the +usiness and what lean enter/rise
could do for them. After agreeing on the four /roFects, /roFect team leaders
were assigned. These team leaders, if the, had not alread, run a NaiIen e0ent,
were required to attend the e0ent of another site in order to gain some
e"/erience in managing a NaiIen e0ent.
In addition to the NaiIen e0ents that were +eing conducted at each of the
sites, the 6:da, lean class was +eing deli0ered in order to reinforce the learning
/oints from the NaiIen e0ents and to e"/and the (nowledge +ase of )interton
em/lo,ees. This lean class was +eing /resented to audiences that had
alread, attended a NaiIen e0ent. $ecause there was a large num+er of
em/lo,ees
who needed to +e e"/osed to the additional lean material in a short /eriod
of time, the lean classes were conducted in /arallel with the scheduled rollout
of the NaiIen e0ents.
This NaiIen e0ent:+ased a//roach to im/lementing lean management
resulted in man, of the com/anies achie0ing demonstrated /erformance
changes during the one:wee( e0entM howe0er, se0eral of the com/anies were
75@
not a+le to sustain that change. In some instances, com/anies e0en re0erted
+ac( to their original /ractices and le0el of /erformance. It would a//ear
there were se0eral reasons for this outcomeB
7. A general lac( of /re/aredness e"isted +efore the NaiIen e0ent was
launched. Much of the data required in order to +egin the anal,sis
/hase on the second da, of the e0ent were not readil, a0aila+le. The
clari2cation to em/lo,ees as to managementPs e"/ectations was limited.
3. A great deal of confusion surrounded the entire wee(:long e0ent as
to what the, were doing and wh,. Little u/:front communication
a+out wh, this lean /rogram was im/ortant to the +usiness or how
it 2t into e"isting +usiness initiati0es had +een /resented.
5. The follow:u/ on Jto doK acti0ities and coordination of multi/le
assignments after the e0ent /ro0ed to +e quite a challenge for man,
of the com/anies. H/en items lingered for wee(s and sometimes
months. Ne, resources within the +usiness were o0erwhelmed with
wor( Ces/eciall, maintenance and information s,stemsD, and decisions
a+out what to do and where to go ne"t were not 0er, clear to
/eo/le within the +usiness.
Although man, com/anies struggled, se0eral com/anies were a+le to
achie0e im/ro0ed /erformance and successfull, sustain it. These com/anies
had se0eral traits in commonB
?. Lea&ershi).
There was a constant dri0ing force that o0ercame a/ath,
and did not let inertia set into the organiIation. There was an unwillingness
to allow statements such as J)e canPt do thatK or JThat wonPt
wor( hereK to sto/ the e1ort. The tenacit, to see it through and a
willingness to tr, new a//roaches were constants.
E. 1irection.
An o0erall /lan or 0ision as to what was ne"t or what success
loo(ed li(e when the /rogram had achie0ed its mission was 0er+aliIed.
Nnowledge a+out what the ne"t ste/s might +e and an understanding
of which technique to use ne"t along that /ath were e0ident.
J. Co!!on goalHobKective.
It was esta+lished u/ front with the /roFect
team what the, were tr,ing to achie0e in a quanti2a+le manner. There
was a concentration of their collecti0e e1orts on measura+le targets.
The, com/ared actual /erformance against those targets, /osted the
actual results in order to trac( /erformance, and were held them
accounta+le for achie0ing those targets.
7>A
G. S"))ort.
The, /ro0ided constant coaching and guidance to the /roFect
team in order to hel/ them gain con2dence with the tools and techniques.
There was continual interaction with the team to hel/ them
sta, on trac(, which remo0ed the /ossi+ilit, of inertia setting in and
/ro0ided encouragement through the tough times in order to (ee/
their s/irits u/.
The com/anies that e"hi+ited these traits were a+le to achie0e a change in
/erformance and sustain that change. In all cases, someone who held a
leadershi/
/osition within the o/eration demonstrated these traits. $e it a /resident,
general manager, or 0ice /resident, each of them was a dri0ing force for
ma(ing the NaiIen e0ent:+ased a//roach +e successful within their /lants.
ProCect "ime 'ine
Bene)ts Ac$ie(ed
GH@@ LH@@ MH@@ AH@@ DH@@ @H@@ ?FH@@ ??H@@ ?EH@@
N. ] 3 N. ] 6 N. ] 6 N. ] 6 N. ] ? N. ] 6 N. ] 5 N. ] 5 E
C@D C7?D C7?D C74D C7=D C<D C6D C;D E
L ] 5 L ] 7 L ] 5 L ] 5 L ] 5 L ] 3
/ote+
N. ] NaiIen e0entsM num+ers in /arentheses indicate the num+er of
/roFectsM L ] num+er of 6:da, lean management classes.
ProKect Ty)e :"antity Res"lt BeneCt
ell manufacturing 73 ,cle:time reduction 54[=;W
Producti0it, increase 7;[64W
SM.* 7? hangeo0er reduction 5;[=4W
Manufacturing Low 7= ,cle:time reduction 34[=4W
Administrati0e Low 7< ,cle:time reduction ?4[=4W
Nan+an/material /ull = In0entor, reduction ?4[=4W
Material Low/stores 6 ,cle:time reduction ?4[@4W
7>7
"ec$ni%ues .tili!ed
'essons 'earned
A
Proclaim a 0ision and clarif, a le0el of e"/ectation at the +eginning
of a /roFect. This is necessar, to set the tone, generate a focus for
common grounding, and hel/ engage all em/lo,ees in the change
/rocess.
A
a/ture the current /erformance of identi2ed /rocesses as a +aseline,
and measure actual /erformance results that directl, align with and
im/act the +ottom line. These should +e tangi+le measures related
to changes in the /rocess Ce.g., /erformance to /lan of /roduction
schedules, le0els of in0entor,, dollars of scra/ /er /roduct out/ut,
/roducti0it, of /roduct out/ut/manhour in/utD.
A
onduct /lanning and anal,sis of the +usiness +efore initiating the
NaiIen e0ent. An understanding of current +usiness initiati0es, where
the com/an, is going, and what le0el of /erformance is needed for a
/roduct and in what mar(ets is crucial.
A
Include acti0ities +oth +efore and after the wee( of the NaiIen e0ent
when /lanning for the e0ent. A lean road ma/ is necessar, in order to
communicate to e0er,one in the organiIation that this is a /rogram to
sta, and not Fust a JLa0or of the monthK initiati0e. $efore the NaiIen
e0ent is conducted, all the detailed anal,sis of demand management,
Lean manufacturing
CNaiIen e0entD
Lean manufacturing
C6:da,D
cross:training
7>:
wor( content, equi/ment a0aila+ilit,, etc. should +e com/leted. After
the e0ent, it is im/ortant for the /roFect team to (now where to go
ne"t and what to e"/ect. This is accom/lished +, creating a road ma/
that loo(s +e,ond Fust the current wee(.
A
Plan on ha0ing the lean management e"/erts remain with the /roFect
for an e"tended /eriod of time during and after the NaiIen e0ent to
e"/lain, demonstrate, and 0erif, use of the lean manufacturing tools
and techniques. The constant coaching and guidance reinforce learning
of the tools and 0erif, that (nowledge has actuall, +een transferred.
A
!ecogniIe that there is an interrelationshi/ +etween +usiness /rocesses.
$usiness /rocesses function as a s/ider we+ of acti0ities, where
a change in one /rocess often a1ects other /rocesses. )hen de/lo,ing
lean manufacturing, it is im/ortant to (ee/ this in mind.
A
Plan a coordinated e1ort of all lean initiati0es across the /lant.
ProFects should +e integrated into one o0erall game /lan in order to
achie0e s,nerg, +etween the /roFects and ma(e sure the, are all
headed in the same direction.
A
Announce to the entire organiIation what is ha//ening, wh, the
com/an, is doing it, and who is in0ol0ed with the /roFect. )hen
/eo/le see acti0it, ha//ening within the organiIation and do not
understand what it is for or wh, it is going on, the, tend to +e
sus/icious of the /roFect and will not readil, engage themsel0es with
the e1ort.
A
Include /rocess owners in the NaiIen e0ent when conducting acti0it,
in their area. It is critical that the, understand the /ro+lems +eing
faced and that the, +u, in to the solution that has +een de0elo/ed.
After all, the, ha0e to li0e with the solution when the e0ent is o0er.
A
InstitutionaliIe or Jloc( downK the new wa, of doing +usiness
through documentation Cstandard wor(D and control C/erformance
measuresD to sustain the change. If the new /rocess is not recorded,
/resented for em/lo,ee training, and monitored as to 0ariation from
the design, then the /rocess has a 0er, high /ro+a+ilit, of returning
to the old wa,s.
7><
"estimonials
JThe four:da, class should ha0e +een done 2rst. It would ha0e gi0en me
a +etter idea what we were doing and wh,.K
B%irst6Line S")ervisor
JThe NaiIen e0ent was e"hilaratingY )e got more done in two da,s than
we ha0e in the /ast two ,ears.K
BSho)Noor 2)erator
JI feel li(e I ha0e +een gi0en a hammer, a screwdri0er, and a /air of /liers.
I ha0e +een shown some tools, +ut I ha0e no idea how to use them.K
Bngineering Manager
JA great deal of ha0oc is created o0er a few da,s and then no+od, remains
to hel/ clean u/ the mess after the e0ent. )e ha0e this long list of Vto doP
items and no+od, to do them.K
BSho) S")erinten&ent
JAfter seeing the lean class, I ha0e a +etter understanding of the a//roach
and where se0eral of the techniques 2t together, +ut I am still short on
how to use the tools and when.K
B:"ality ngineer
JThe e0ent was great. )ho is going to ma(e sure we (ee/ doing itRK
BSho)Noor 2)erator
7>5
7>
&ase Study &:
,ig$3+olume3;ocused
;actory ProCect
&ompany Pro)le
ithin wal(ing distance of the cit, limits of Hrlando is a manufacturer
of engineered chain /roducts called T,or hain. T,or
hain is actuall, the com+ination of two se/arate facilities, T,ron
and or+in. .ach o/eration had +een +uilding chain since the 7@44s, +ut
/lant rationaliIation resulted in consolidating the /lants in 7==7. The
Hrlando site had +een e"/eriencing a reduction in siIe and head count since
the 7=<4s and had the s/ace a0aila+le to relocate equi/ment.
T,or was a unioniIed sho/, and wor(ers were mem+ers of the United
Steel )or(ers local @3=. There were 5;4 em/lo,ees on the /a,roll, of which
7<; were direct la+or. The facilit, s/rawled o0er 644,444 square feet and was
aligned in a traditional factor, la,out with assem+l, de/artments and fa+rication
de/artments. The /rimar, manufacturing /rocesses were turning,
grinding, cold forming, heat:treating, and the manual and semi:automated
assem+l, of chain.
H0er the ,ears, this o/eration was at one /oint a+le to increase sales to
o0er a;4 million /er ,ear, with a /ea( of a;; million coming in 7==?M howe0er,
se0eral ,ears of mar(et decline, changes in ownershi/, and a lac( of in0estment
had left the com/an, with sales re0enues of a5@ million and dro//ing
/ro2ts. .1orts to con0ince se0eral di1erent owners that a signi2cant in0estment
in ca/ital was required to turn this o/eration around were not successful,
thus lea0ing them with limited alternati0es to im/ro0e the o/eration.
*
7>>
4ri(ers for &$ange
Hther than the o+0ious loss in mar(et share, decreasing re0enues, and limited
/ro2t num+ers, this o/eration was +eing hit with hea0, foreign com/etition
from such unli(el, sources as India, hina, Singa/ore, and Taiwan. The
foreign com/etition was /roducing a /roduct of com/ara+le qualit, at a cost
signi2cantl, less than T,orPs. In addition to the e"ternal forces for change,
there were internal forces as well. )hen T,orPs new /arent com/an, came
to 0isit, it was made clear that this o/eration needed to ma(e some signi2cant
changes to com/ete as a 0ia+le entit, within the grou/. )ith these identi2ed
issues as dri0ers for change, it was not diUcult to esta+lish a moti0ation for
change within this organiIation.
ProCect Background
In 7==?, a strategic /lan was de0elo/ed to im/lement Jfocused factoriesK
throughout the facilit,. This /lan was well thought out, +ut it was also
e"/ensi0e due to the required in0estment in new ca/ital. In earl, 7==<, T,or
hain in0ited a grou/ of /roducti0it, consultants to wor( with the management
team and sho/ Loor to +oost on:time deli0eries and increase /roducti0it,.
The /roFect did not go as /lanned and had a negati0e im/act on
relations +etween management and the sho/Loor union wor( force. This
unresol0ed conLict was still e0ident when, in Ma, of 7===, T,or again
initiated a com/an,:wide e1ort to im/ro0e the o/eration through the
im/lementation
of lean manufacturing.
The lean e1ort initiall, +egan as a series of NaiIen e0ents. The /rogram
oUciall, (ic(ed o1 in Ma, 7===, with four indi0idual NaiIen /roFects CSM.*,
Nan+an, and two /roduct Low cellsD. Three of these /roFects were selected
+ecause the, were the right siIe to quic(l, demonstrate a change in
/erformance
through the su//ort of sho/Loor em/lo,ees. It was considered critical
to +egin mending relations with the union and tr, wor(ing together through
the NaiIen e0ent as a wa, to Fointl, im/ro0e the o/eration. The fourth /roFect,
Nan+an, was considered an integral /art of the de0elo/ment of a Jfocused
factor,K conce/t that was to +e de/lo,ed later on in the ,ear. *uring the e0ent,
target sheets were created for each of the indi0idual /roFects, and se0eral of
the /roFects were a+le to demonstrate im/ro0ement during the e0ent.
H0er the course of the ne"t few months, T,or hain continued to launch
additional NaiIen /roFect teams across the factor, as Jislands of im/ro0ement.K
A tremendous amount of energ, was +eing e"/ended and initiati0es
7>6
were getting startedM howe0er, the, were ha0ing trou+le com/leting all the
/roFects, including the focused factor,. )orse ,et, results were not showing
u/ on the +ottom line. In &o0em+er, it was determined that a change in
course was necessar, in order to channel the collecti0e energies of all
em/lo,ees
and +egin to generate results at the +ottom line. So, a course was set for
im/lementing focused factories across the entire facilit,.
In *ecem+er 7===, the *irector of Plant H/erations conducted a re0iew of
the /rogramPs o0erall /rogress and led a discussion of alternati0e a//roaches
with the President of T,or hain and the com/an,Ps controller. This meeting
was used to clarif, e"ecuti0e management e"/ectations relati0e to the
lean /rogram and to o+tain su//ort for the new direction.
After a length, discussion, the, decided u/on the following actionsB
7. hange the course of the /roFect to concentrate on getting the focused
factories u/ and running, rather than s/reading the e1orts across the
o/eration through the Jisland of acti0it,K a//roach.
3. Hnce the 2rst focused factor, was u/ and running as a good Jwor(ing
modelK that satis2ed an identi2ed e"it criteria, re/licate that model
throughout the +alance of the factor,.
5. Scale +ac( the amount of NaiIen /roFects currentl, scheduled and
com/lete those /roFects that had alread, +een started +efore underta(ing
an, new NaiIen /roFects.
6. S/ecif, a /roFect management structure with /rotocol, steering committee,
detail schedules, de2ned deli0era+les, assigned ownershi/ for
deli0era+les, etc.
;. hange organiIational res/onsi+ilit, for the entire set of manufacturing
/rocesses that su//ort a focused factor,, and select a focused
factor, manager with ownershi/ for the /roduct from Jcradle to
gra0e.K
?. .sta+lish o/erational measures that would demonstrate +ottom:line
im/ro0ements through im/ro0ed in0entor, turns, reduced head
count, reduced /ast:due orders, etc. and would hold the focused
factor, manager accounta+le for the /erformance.
$, re0iewing annual demand 0olumes for the entire line of chain /roducts,
T,or was a+le to determine that the highest 0olume /roduct demand
7>?
was for their snowmo+ile dri0e:chain /roduct line, which was alread, +eing
im/lemented +ut with limited success. &ot onl, was this a high:0olume
demand /roduct, +ut it was also a 0er, standard /roduct with little com/le"it,
+, wa, of manufacturing /rocesses. In addition, T,or claimed @@W of
the mar(et for snowmo+ile chainM therefore, it was determined to ma(e that
facilit, the /ilot focused factor,.
The /rimar, o+Fecti0es esta+lished for the snowmo+ile focused factor,
includedB
7. .liminate all /ast:due orders C;444 strands at the time of /roFect
launchD.
3. Im/ro0e in0entor, turns from ; to ;4.
5. UtiliIe Nan+an re/lenishment for all high:0olume com/onents.
6. Assign a focused factor, manager.
;. Im/lement a s(ill:+ased /a, s,stem to re/lace the current unioniIed
indi0idual incenti0e /a, s,stem.
?. UtiliIe one:/iece Low methodolog, Cone strand of chainD to enhance
qualit, feed+ac( and s/eed manufacturing c,cle time.
ProCect Approac$
As was stated earlier, in *ecem+er 7=== the o0erall a//roach to the lean
initiati0e was altered. !ather than s/read the energ, of man, /eo/le across
a large area Cremem+er, this facilit, is 644,444 square feetD, the a//roach was
changed to that of esta+lishing a good wor(ing model that could +e du/licated
throughout the factor,.
The initial ste/ in this /rocess was to esta+lish a full:time lean team
dedicated to de/lo,ment of the lean /rogram. This allowed all those indi0iduals
who were tr,ing to /rioritiIe acti0ities with /art:time resources to esta+lish
a single, /rimar, focus E im/lementation of lean manufacturing. The
ne"t ste/ was to concentrate e1orts on securing a win. This was accom/lished
+, designating s/eci2c /roduct grou/s or families Ce.g., snowmo+ile chainD
toward which the lean team would channel their e1orts at de0elo/ing focused
factories. This is not to sa, that all other NaiIen e1orts were /ut on hold.
T,or Fust needed to reduce the quantit, of NaiIen e0ents that had +een
scheduled and reschedule them to some later date. This relie0ed the +urden
on the organiIation infrastructure so that acti0ities could now +e com/leted
and the focused factor, conce/t could +e de/lo,ed. The o0erall conce/t for
the focused factories required se0eral changes within the o/erationB
7>@
7. The ownershi/ for /erformance of the focused factor, was realigned
to the entire /rocess of /roducing chain. .0en though assem+l, cells
were at one end of the +uilding and fa+rication of com/onents used
in the assem+l, of chain was located at the other end of the +uilding,
res/onsi+ilit, for +oth was assigned to the focused factor, manager
of that /roduct grou/ing.
3. In the focused factories, the assem+l, cell was esta+lished 2rst, as it
was closest to the customer. There were s/eci2c lean /rinci/les
required for the assem+l, cell to function, and s/eci2c /erformance
le0els were e"/ected. As the cell achie0ed these Je"it criteriaK and was
considered sta+le, then the fa+rication cell was +rought on +oard.
C-or the snowmo+ile factor,, these e0ents ha//ened simultaneousl,
due to the fact that it had a narrow /roduct line with high:0olume
demand and dedicated equi/ment.D
5. )hen +oth cells had satis2ed the e"it criteria and were /erforming
at a sta+le le0el, then the, could +e lin(ed through a Nan+an /ull
signal for /art re/lenishment. This action eliminated the stoc( room
and generating /art demand +ased on M!PII.
6. The last ste/ was to relocate the entire focused factor, to its 2nal
con2guration, there+, com/letel, lin(ing the entire focused factor,
from +oth a /h,sical and a logistical /oint of 0iew. It was done in
this manner /rimaril, +ecause of the e"/ense and ris( in0ol0ed in
mo0ing the fa+rication equi/ment +efore (nowing which end of the
+uilding was a//ro/riate.
;. The indi0idual incenti0e s,stem used to com/ensate the wor(force
had to +e re/laced +ecause it was dri0ing the wrong +eha0ior and did
not 2t with the new focused factor, conce/t. Therefore, T,or management
de0elo/ed a new s(ill:+ased /a, s,stem. $, la+or contract,
the, could do this +ecause the, were designing a new wor( area with
com/letel, di1erent o/erating rules from the rest of the sho/. This
new s,stem allowed direct la+or em/lo,ees to ma(e the same rate of
/a, the, made under the old s,stem, +ut onl, after the, attained a
s/eci2ed le0el of s(ill. The, esta+lished one Fo+ classi2cation and
called it Jfactor, technician.K
-or the lean /roFect team, selecting the focused factor, manager as soon
as /ossi+le was (e, to successfull, im/lementing the new structure. The
original launch for the snowmo+ile /roduct grou/ had +een struggling. It
was decided that a leader assigned to manage the entire manufacturing /rocess
would accelerate the im/lementation immensel,. This /ro0ed to +e
76A
a+solutel, correct. In addition to the organiIational change for the focused
factor, manager, the team had to address union issues surrounding the new
/a, scenario. Management e"/lained to the union leadershi/ how the new
/a, s,stem was to wor( and then /ut the new /osition out for +id with a
0er, /ositi0e res/onse.
Hnce the leader was assigned and the /a, s,stem installed, the area was
o1 and running. After o/erating with the new lean /rocesses for se0eral wee(s,
the /erformance of the focused factor, and the team +uilding among direct
la+or cell team mem+ers had im/ro0ed signi2cantl,. The o/erators were
concentrating
0er, hard on eliminating Cfor the 2rst timeD their /ast:due orders
and 2"ing qualit, issues as the, surfaced. In an e1ort to accommodate
crosstraining
needs, the cell team set u/ a game /lan for integrating cross:training
the 2rst two wee(s of the month and focusing on /roduction the last two
wee(s of the month. )or(ing in this manner allowed the cell team time to
de0elo/ its /eo/le and still satisf, customer demand requirements.
The lean team was a+le to rather quic(l, re/osition the focused factor,
conce/t from a struggling im/lementation to a high:L,ing success +, le0eraging
three elementsB C7D focusing the im/lementation e1ort around a /roduct
grou/ing, C3D satisf,ing the needs of the em/lo,ee through the /a, s,stem
and training /lan, and C5D assigning accounta+ilit, for the /rocesses that
/roduced a gi0en /roduct in order to im/ro0e /erformance and achie0e
+ottom:line results.
ProCect "ime 'ine
Milestone Plan
@H@@ ?FH@@ ??H@@ ?EH@@ F?HFF
ProFect is
launched
Area is
cleared and
/re/ared
Assem+l, is
mo0ed and
/roduction
is sta+le
om/onent
manufacturing
is
relocated and
/roduction
read,
Snowmo+ile
focused
factor, is
functioning
as a unit
767
"ec$ni%ues .tili!ed
Program and /roFect
management
mechanisms
-ocused factor,
managerB assessment
and selection
andidate self:e0aluation, change
rece/ti0it, /ro2le, $el+in roles, grou/
inter0iew, ga/ anal,sis, de0elo/ment
/lan
Lean manufacturing
C-i0e Primar,
.lementsD
routing anal,sis
Lean manufacturing
CNaiIen e0entsD
Lean manufacturing
C6:da,D
wor(, wor( element anal,sis, ;S
house(ee/ing, muda, /rocess ma//ing,
Nan+an, HeiFun(a, Po(a:,o(e, TPM, H..,
+ig si" losses, Fo+ instruction training,
cross:training
76:
Bene)ts Ac$ie(ed
'essons 'earned
A
UtiliIation of a full:time Jlean teamK is necessar, in order to esta+lish
/riorities and consolidate e1orts in the same direction.
A
Assigning ownershi/ for /rocess im/ro0ement along /roduct grou/ings
remo0es the functional silo 0iew of /ro+lems and assigns
accounta+ilit, for /erformance im/ro0ement to one /erson. This
organiIational change has a signi2cant inLuence on how quic(l,
/roFect o+Fecti0es are achie0ed.
A
Agreeing on e"/ectations earl, in the /roFect is necessar, so that all
/arties (now what the, are tr,ing to achie0e and what success loo(s
li(e when the, get there.
A
Nnowing which lean tools and techniques to use when and how /la,s
an inLuential role in /roducing +ottom:line result quic(l,.
A
S/reading /art:time resources across man, initiati0es leads to misalignment
of /riorities and the ina+ilit, to com/lete all assigned
acti0ities. It /laces undue +urdens on the organiIation and ma(es it
diUcult to com/lete an, acti0ities well.
A
Assigning the com/an, controller to the steering committee can ha0e
a tremendous +ene2t when it comes time to de0elo/ metrics for a
/roFect and when it is time to Fustif, the focused factor, conce/t to
others in the organiIation.
A
It is +est to assess and select the focused factor, manager as earl, in
the /rocess as /ossi+le, de2nitel, +efore im/lementation.
A
Indi0idual incenti0es /roduce localiIed o/timiIation, which does not
su//ort the lean manufacturing conce/t. The remo0al of an indi0idual
incenti0e:+ased /a, s,stem is a mustM howe0er, it needs to +e done
with the com/lete (nowledge and understanding of the union, /articularl,
in light of how it is going to a1ect an indi0idualPs /a,.
Metric Baseline
Act"al
=F?HFF> Target
*eli0er, 64W =4W 744W
Lead:time @ wee(s 5 wee(s 3 wee(s
In0entor, turns ; 54 ;4
S/ace <6;4 ft
3
?@44 ft
3
E
Head count 37 7< 76
76<
A
$e sure to de0elo/ and follow a game /lan when changing the wor(
rules and reward s,stem of em/lo,ees. Thin( through how to get
from /oint A to /oint $. It is not enough to ha0e a good solution to
a /ro+lem. That solution must +e e"ecuta+le.
"estimonials
JI ha0e +een im/ressed with the fundamental culture change that has
ta(en /lace with the im/lementation of lean in the focused factor,. )e
ha0e a long:standing histor, of detailed Fo+ descri/tions wor(ing in an
incenti0e:/a, structure. The formulation of the factor, technician /osition,
which includes res/onsi+ilit, for all equi/ment and /rocesses along
with /roducing to customer demand, has allowed us to ma(e this culture
change with a high le0el of acce/tance from the wor( force.K
B%actory
Manager
JThe wa, the snowmo+ile and +loc( chain factor, is set u/ is a good idea.
The /arts are closer together and ,ou can catch the +ad /arts faster.
.0er,one hel/s each otherM that is a /lus. The +ig /ro+lem so far has +een
the heat:treat o/erationPs turnaround time on our /arts.K
BTechnician
JI li(e what I see with the new snowmo+ile cell factor,. )hat a great wa,
to do the right thing in +uilding chain. It will reall, wor(. I enFo, wor(ing
this wa,. )e should ha0e done this a long time ago.K
BTechnician
JLean manufacturing is a good idea. 9reat things ha0e resulted since the
+eginning of the focused factor,. Training needs to +e em/hasiIed more.
)ith the e"/erience that we ha0e in the area, /eo/le should recei0e the
+est training /ossi+le.K
BTechnician
JLean is a great conce/t with /otential in qualit, and /roducti0it,. It
+rings new challenges to the wor(force. Hur onl, /ro+lem is our heattreat
turnaround time.K
BTechnician
J-rom the initial conce/t of creating the focused factor,, we (new it was
going to +e a long Fourne,. There ha0e +een man, challenges along the
wa, and there will +e man, more. H0ercoming those challenges ma(es
for a stronger team en0ironment and wor( force. Im/lementation of lean
manufacturing ta(es dedication. 'ou must eat, +reath, and slee/ lean. If
,ou donPt, ,ou are not tr,ing hard enough. Success is ,our onl, o/tion.K
B%actory Manager
765
7>
&ase Study 4:
Bai!en E(ent3Based
;ocused ;actory Pilot
&ompany Pro)le
ocated in the western su+ur+s of *en0er, $el:!on is a manufacturer of
engineered chain /roducts. $el:!on +egan o/erations at this facilit, in
7=63, and the, em/lo, 547 /eo/le, of which 377 are mem+ers of the
local machinist union 7?<5. The facilit, is s/read across 5<4,444 square feet
and organiIed around the /roduction of its two main /roduct lines E
con0e,or idlers and ma(e:to:order chain. A//ro"imatel, one quarter of the
/lant has +een dedicated to the manufacture of idler /roducts, with the
remaining three quarters laid out in a traditional factor, Low for the /roduction
of ma(e:to:order chain. The /rimar, manufacturing /rocesses
within this facilit, include /unching, grinding, forming, heat:treating, welding,
/ainting, and the manual assem+l, of chain.
$el:!on had +een a+le to increase annual sales re0enue for the com+ined
/roduct lines to as high as a?5 million +ac( in 7==;. The, commanded a
signi2cant amount of a0aila+le mar(et share, in /art +ecause the, /roduced
Je0er,thing for an,+od,.K Hutside com/etition had ne0er reall, +een a se0ere
/ro+lemM therefore, $el:!on had alwa,s +een a source of /ositi0e cash Low
for the /arent cor/oration. $ecause the com/an, was +eing utiliIed as a Jcash
cow,K in0estment in the +usiness for maintaining and u/grading ca/ital
equi/ment had +een limited. .1orts to con0ince se0eral di1erent owners that
'
76>
an in0estment in ca/ital was required to sustain the o/eration and hel/ it
achie0e /articular +usiness o+Fecti0es for the future were limited.
H0er the ,ears se0eral niche /la,ers +egan to enter the mar(et/lace and
si/hon o1 s/eci2c mar(et sectors, +ut this was not considered a maFor /ro+lem
+ecause the com/an, was still generating signi2cant cash Low for the
+usiness and still had /lent, of mar(et share remaining. It was not until the
entire industr, as a whole +egan to fall o1 that signi2cant /ro+lems +egan
to surface.
4ri(ers for &$ange
$ecause $el:!on was all things to all /eo/le, the o/eration managed all
/roducts in e"actl, the same wa,. This, in turn, meant that the maForit, of
their /roducts had 0er, long lead:times com/ared to mar(et/lace requirements.
It also meant that management s/ent a signi2cant amount of time
e"/editing all /roducts through the facilit, in order to satisf, s/eci2c customer
deli0er, dates Cwhich were +eing missedD. It resulted in high unit costs
that were squeeIing /ro2ta+ilit, li(e ne0er +efore. In addition, $el:!on was
+eginning to recei0e less than fa0ora+le feed+ac( from customers through
su//lier Jscore cardsK and e0en encountered un/leasant customer site 0isits.
.0en though $el:!on had sta+le sales re0enues at the time, it was +ecoming
increasingl, o+0ious that that situation was not going to last unless
something changed. The con0e,er idler o/eration was facing hea0, com/etition
from multi/le sources. The, were a small /la,er in the mar(et/lace
and were tr,ing to com/ete on /rice and lead:time. A0aila+ilit, and s/eed
to mar(et were the com/etiti0e criteria that customers required, and the
com/an, was struggling to consistentl, satisf, this demand. In order for $el:
!on to regain mar(et share, the, needed to reduce lead:time on standard
/roducts to 20e da,s or less and maintain on:time deli0er, relia+ilit, of =;W
or +etter.
In addition to these mar(et forces for change, there were internal forces as
well. In late 7==@, $el:!on was acquired +, a new /arent com/an,. )hen the
e"ecuti0e management of the new /arent com/an, came to 0isit, the, found
an organiIation that was o/erating with 7=;4s /roduction ca/a+ilit,, sho/Loor
la,out, management structure, and organiIational culture, as well as a traditional
manufacturing /hiloso/h,. The, saw equi/ment that was not maintained,
manufacturing /rocesses that were laid out +, functional de/artment,
multi/le la,ers of management re/orting, direct la+or /iece:wor( incenti0es
Cremem+er, this was a union sho/D, and undisci/lined house(ee/ing /ractices.
766
It was clear that this o/eration needed to im/lement a signi2cant change in
its +usiness /ractices to +e com/etiti0e and satisf, new le0els of o/erational
/erformance. )ith +oth mar(et share and internal issues as the /rimar, dri0ers
for change, this organiIation (new it would ha0e to ado/t a di1erent a//roach
to manufacturing in order to +ecome a com/etiti0e entit,.
ProCect Background
In the s/ring of 7===, the new /arent com/an, +egan to roll out a strategic
/rogram focused on the de/lo,ment of lean manufacturing within the
cor/oration.
The /rogram was to +e rolled out through a series or Jwa0eK of
NaiIen e0ents and 6:da, lean classes. The lean classes were to +e utiliIed as
reinforcement for the (nowledge transfer of lean tools and techniques utiliIed
during the NaiIen e0ent. As the em/lo,ees +ecame more con2dent in their
use of the tools, the, would schedule other NaiIen e0ents and stri0e for
further continuous im/ro0ement and waste elimination within the facilit,.
In A/ril 7===, $el:!on hosted their 2rst NaiIen e0ent. Attendees from
se0eral other sister facilities were in0ited to /artici/ate and learn how to
im/lement the lean /rogram. $el:!on had identi2ed four indi0idual NaiIen
/roFects Corder administration, setu/, cell manufacturing, and assem+l, LowD
for the e0ent. All of these /roFects were selected with the idler /roduct line
in mind. This /roduct had se0eral o/erational issues relati0e to +oth
manufacturing
lead:times and e"cess in0entor,. It was felt that +, coordinating
se0eral /roFects along the same /roduct line s,nergies would de0elo/ +etween
the NaiIen /roFects, and this would ha0e the greatest im/act on the idler
+ottom:line /erformance.
In March 7===, the /resident of $el:!on had as(ed his management team to
select four /roFects for the u/coming NaiIen e0ent. The team loo(ed at their
o0erall +usiness, anal,Ied the /roduct demand 0olumes for each of the /roduct
grou/s, and re0iewed the o/erational /erformance of the two /rimar,
/roduct lines, con0e,er idlers and engineered chain.
The team selected the idlers +ecauseB
7. The, re/resented a74 million of sales Cnearl, 7;W of all re0enuesD.
3. Production of the idlers was alread, self:contained, with all the manufacturing
/rocess on one side of the +uilding.
76?
5. There was signi2cant o//ortunit, to im/ro0e /erformance with limited
ris(.
6. The engineered chain /roduct line in0ol0ed a greater num+er of /art
num+ers, a signi2cant mi" 0ariet,, and common resources and equi/ment,
and most of the fa+rication equi/ment was not surfacemounted
Cmeaning that redesign or rearrangement would require
digging and /ouring new concreteD. In addition, most of the utilities
were laid in the concrete Looring.
The /roFect sco/e im/acted con0e,er idler /roduction from incoming
raw material to shi//ing. The manufacturing /rocesses included forming,
welding, assem+l,, and /ainting. The /roFect o+Fecti0es includedB
7. !educe in0entor, le0els from a334( to a7@4( C34WD.
3. Achie0e on:time deli0er, /erformance of =;W or +etter.
5. !educe manufacturing lead:time to ; da,s or less.
6. !educe changeo0er times +, ;4W.
;. Im/ro0e s/ace utiliIation.
?. Im/ro0e res/onsi0eness through Le"i+ilit,.
ProCect Approac$
$efore the NaiIen e0ent was scheduled, /artici/ants from sister com/anies
were in0ited to attend the wee(:long NaiIen e0ent. The o+Fecti0es were twofoldB
C7D introduce the /artici/ants to the NaiIen a//roach, and C3D ha0e the
/artici/ants +ring an outsiderPs /ers/ecti0e to $el:!on. The teams were
sta1ed with mem+ers that re/resented multi:functional +ac(grounds and
included sho/ su/er0isors, o/erators, union stewards, engineers, managers,
etc. $, using cross:functional teams, the statement, JThatPs the wa, we ha0e
alwa,s done things,K could more easil, +e challenged.
The NaiIen e0ent was (ic(ed o1 on the 2rst da, with a full da, of training
and education. This training consisted of a mi"ture of lecture, e"ercises,
discussion, and simulations. The content addressed the o0erall NaiIen /rocess,
the schedule for the wee(, and the introduction to se0eral lean tools
and techniques Ce.g., one:/iece Low, Nan+an, SM.*, TPM, loading charts,
/rocess ma//ing, Po(a:,o(eD.
The o/erational /rocesses for /roducing and deli0ering the con0e,er idler
/roduct line were di0ided among four teams. Hn the second da,, each team
had to clarif, its sco/e and o+Fecti0es, ma/ the current /rocess, and gather
76@
+aseline o/erational /erformance data. Hnce the, had collected all the data
and s/ent time anal,Iing the current /rocess, the, were facilitated through
a +rainstorming e"ercise +, the team leader in order to de0elo/ o/tional
solutions to satisf, the agreed u/on o+Fecti0es. Hnce the new design was
agreed u/on, it was turned o0er to maintenance and s(illed craft to +egin
relocating +ins, rac(s, and equi/ment.
$, the end of the third da,, the cell area had had enough equi/ment
rearranged to demonstrate the Low of the new /rocess and recogniIe signi2cant
gains in the area of manufacturing lead:time and in0entor, reduction.
H+0iousl,, the in0entor, was still there, +ut the, had designed a new
manufacturing
Low that would not require the e"cess wor( in /rocess that was
currentl, a0aila+le. -inall,, the teams generated a 54:da, Jto doK list to
manage the remaining outstanding acti0ities Ce.g., ordering weld curtains,
+leeding o1 in0entor,, running utilit, linesD.
$etween Ma, 7=== and March 3444, $el:!on scheduled a series of followu/
NaiIen e0ents in such areas as SM.*, ;S house(ee/ing, and Nan+an to
sustain the gains and (ee/ /rogress mo0ing forward. These mini:NaiIen
/roFects were used to continuall, reinforce the /rinci/les of lean and
demonstrate
to the wor(force that $el:!on was serious a+out utiliIing this
a//roach to im/ro0e the +usiness.
Se0eral of the 2rst SM.* NaiIen /roFect ideas came from the original 6:
da, NaiIen e0ent. The 54:da, Jto doK list /ro0ided some initial insight as to
what equi/ment and /rocesses needed to +e addressed. Teams for the later
SM.* NaiIen /roFects were sta1ed with a cross:functional re/resentation of
em/lo,ees from across the /lant. Most of the teams were sta1ed with the
manufacturing manager, equi/ment o/erators, /roduction engineer, tooling
engineer, and a manufacturing re/resentati0e from the engineered chain
/roduct line. H0er the course of the ne"t 74 months, the, conducted se0en
SM.* NaiIens Ca0eraging a+out one e0er, ? wee(sD. The, addressed welding
2"tures, shears, shaft /roduction, roll cuto1s, angle shear o/erations, die
consolidation, and the de0elo/ment of a die:e"change s,stem. These e1orts
signi2cantl, contri+uted to the reduction of lead:time and increased Le"i+ilit,
within the idler /roduction area.
As the idler team +ecame more con2dent in their NaiIen a//roach, its
lean e1ort +ecame much more of a self:/er/etuating situation. !ather than
formall, scheduling a set num+er of NaiIens /er month or quarter, management
let the team decide when, where, and how man, the, were going to
conduct. )hen the 2rst mini:NaiIen e0ent was initiated, the team was s(e/tical
as to whether this initiati0e was going to lastM howe0er, after the e0ent
was 2nished and the, saw how much was accom/lished and how management
7?A
was actuall, listening and reacting to their recommendations, the grou/ was
energiIed. $etween Gul, 7=== and March 3444, the idler o/eration conducted
no less than nine mini:NaiIen e0ents Cin addition to the SM.* NaiIensD.
These mini:e0ents focused /rimaril, onB
7. ;S house(ee/ing Cto throw out unnecessar, items and identif,
required itemsD
3. -reeing u/ Loor s/ace Cto im/ro0e the Low of material, allow /ointof:
use deli0er, for <;W of raw materials, and im/ro0e the a+ilit, to
/erform line:of:site managementD
5. ross:training Cto increase res/onsi0eness and Le"i+ilit, within the
unitD
6. Limiting and controlling in0entor, Cto esta+lish same:da, deli0er,
/erformance on the to/ si" high:0olume /roducts and reduce leadtime
through the manufacturing area +, remo0ing e"cess wor( in
/rocessD
These:mini e0ents hel/ed to sha/e the focus and direct the energies of the
idler team toward constant continuous im/ro0ement.
The team went +e,ond Fust factor, rearrangement and Low. In Hcto+er
7===, the team recei0ed a//ro0al to address the Low of material and
im/lemented
a Nan+an re/lenishment s,stem. The, started to im/lement the
s,stem at the /oint of su//l, for raw materials. The team anal,Ied the raw
material and com/onents /arts Low, determined demand +eha0ior for usage,
and identi2ed 0endors of the material. In *ecem+er 7===, the teams selected
four 0endors with whom to de0elo/ o/erating rules and /ilot the im/lementation
of Nan+an for 36 /arts. The, de0elo/ed a 0isual Nan+an /rocess that
utiliIed a Jfa"+anK as the re/lenishment signal +etween the su//lier and the
customer. The a//roach wor(ed out so well that +, March 3444 the, had si"
di1erent 0endors on Nan+an for 55 indi0idual /arts. In the same month,
the, were a+le to turn on a Nan+an re/lenishment s,stem for a s/eci2ed le0el
of 2nished goods, there+, allowing them to +uild to the demand of a 2nished
Nan+an signal.
HrganiIationall,, changes were made within the idler /roduct line that
were /recursors to the esta+lishment of the focused factor, conce/t. Initiall,,
$el:!on was de/lo,ing lean tools and techniques on the sho/ Loor
through NaiIen e0ents. In order to esta+lish ownershi/ for the e1ort and
maintain continuit,, it made sense to assign someone to manage the o0erall
/roFect, /articularl, now that all the manufacturing /rocesses were collected
together in a cell. This manager had ownershi/ for the /eo/le, re/orted on
7?7
/erformance, and facilitated the lean acti0ities. $el:!on used this e"/erience
and the associated lessons learned from this /ilot focused factor, as the
model for other focused factories that were designed and im/lemented
throughout other areas of the facilit, during the +alance of calendar ,ear
3444.
ProCect "ime 'ine
"ec$ni%ues .tili!ed
Milestone Plan
GH@@ MH@@ AH@@ ?FH@@ FJHFF
NaiIen e0ent
is initiated
-irst SM.*
NaiIen is
conducted
Mini:NaiIens
are launched
Nan+an
s,stem is
a//ro0ed
Nan+an
s,stem is
functional
Hne:da, SM.* NaiIen Process ma//ing, 0ideota/e, internal 0s.
e"ternal setu/, one:touch methodolog,,
/arallel functions C/it crewD
Lean manufacturing
CNaiIen e0entD
Lean manufacturing
C6:da,D
cross:training
7?:
Bene)ts Ac$ie(ed
'essons 'earned
A
Assign ownershi/ for /rocess im/ro0ement along an entire /roduct
famil,. This remo0es the functional silo 0iew of /ro+lems and assigns
accounta+ilit, for /erformance im/ro0ement to one /erson and his
or her team. This organiIational change will signi2cantl, im/act how
quic(l, /roFect o+Fecti0es are achie0ed.
A
Understand the o0erall +usiness /lan and where resources ha0e /re0iousl,
+een allocated +efore launching a lean manufacturing e1ort.
onLicts in +usiness /riorities and confusion a+out o/erational focus
will arise if this issue is not addressed.
A
MinimiIe e"/osure, mitigate ris(, and o+tain results to hel/ re0eal
cause:and:e1ect relationshi/s +, utiliIing /ilots and a//l,ing the
lessons learned.
A
Identif, the cell leader as earl, in the /rocess as /ossi+le to ha0e time
to assign ownershi/ for the new manufacturing /rocess.
A
Machine o/erators are often the /rocess e"/erts and a great source
of ideas for setu/ reduction /roFects.
A
Ha0e a dedicated team C/roFectD leader for the transformation to lean
manufacturing. The +alance of the /roFect team should +e dedicated
at least ?4W of the time.
A
Address the issue of cultural change. ommunicating the Jneed for
changeK is /aramount to achie0ing su//ort for the new wa, of doing
+usiness.
A
-ollow through on all /lanned commitments and demonstrate results
Ce0en those that were less than successfulD. This +uilds trust throughout
the organiIation and su//orts the Jwal( the tal(K mentalit,.
Metric Baseline Act"al =FJHFF> Target
Hn:time deli0er, @;W =;W =;W
Manufacturing
lead:time
?[75 da,s 5[? da,s ; da,s or less
In0entor, le0el
Craw materialsD
a334( a764( a7@4(
Setu/ reduction @@ minutes 34 minutes 66 minutes
S/ace utiliIation 6=,?44 ft
3
6@,=44 ft
3
6@,444 ft
3
7?<
"estimonials
JNaiIen wor(ed out well. )e wor(ed together, had good results, and
reduced setu/ time. )e need to continue this e1ort to get more done.K
BSho)Noor 2)erator
JI was 0er, enthusiastic in the +eginning and saw some of m, ideas
im/lemented, +ut then it sto//ed and I +ecame discouraged. Small quantities
are hard to get used to.K
BSho)Noor 2)erator
JIt is necessar, to ha0e all /arties on the same /age Cmanagement,
su/er0ision, o/erators, etc.D, and it is 0er, im/ortant that the decisions
of the team can +e im/lemented, without signi2cant management
inter0ention.K
BPro&"ction Planner
7?5
7>
&ase Study E:
Assem2ly Production
.nit ProCect
&ompany Pro)le
ust outside the cit, limits of downtown Houston is a /roducer of industrial
a//lication +earing /roducts called A9 $earing. A9 $earing +egan
o/erations in 7=;= and has o/erated as a union facilit, with a total
em/lo,ee head count of ;;4, of which 63; are mem+ers of the local 77?4.
The facilit, occu/ies ;44,444 square feet, including administrati0e oUces.
The o/eration has followed a traditional manufacturing la,out, with indi0idual
de/artments segregated +, /roduction /rocess with su/er0ision
assigned accordingl,. The /rimar, manufacturing /rocesses ha0e included
/ainting, grinding, turning, heat:treating, and manual and automated assem+l,
of +earings.
H0er the course of the last ; ,ears, A9 $earing had +een a+le to consistentl,
sustain to/ line re0enue in the range of a=4 to a744 million /er ,ear.
The com/an, has +een 0er, /ro2ta+le and successful at deli0ering on customer
needsM howe0er, unit /ricing /ressures, ca/acit, constraints on some
assem+l, lines, lac( of manufacturing Le"i+ilit,, and e"cessi0e in0entor,
le0els ha0e made it diUcult for A9 $earing to im/ro0e the o0erall /erformance
of its o/eration.
M
7?>
4ri(ers for &$ange
Hne of the issues surrounding the im/lementation of change at A9 $earing,
was the fact that the, were ma(ing good /ro2ts. Their margins were 0er, good
for their industr,, their re0enue line was sta+le, and the, had +een a+le to
satisf, /roduct a0aila+ilit, requirements of customers through the utiliIation
of a national distri+ution warehouse s,stem. In addition, as mentioned earlier,
this was a union sho/ that had not e"/erienced a great deal of change in recent
histor,. Under the e"isting contract, union mem+ershi/ was a+le to ma(e
good mone, through indi0idual /iece:rate incenti0e and were not reall,
interested
in altering that course. This +usiness scenario /resented a 0er, diUcult
situation in which to initiate a change /rogram. )hen an organiIation is not
in /ain and has +een ma(ing good mone, for se0eral ,ears, it is diUcult to
see a need to change how the +usiness is run.
Although the need for change was not 0isi+le 2nanciall,, it was e0ident
o/erationall,, and for A9 $earing the need for change came from se0eral
sources. The initial or /rimar, dri0er came from the new /arent com/an,
that now owned A9 $earing. The /arent com/an, had +egun to launch an
im/ro0ement initiati0e across all of its facilities and was e"/ecting all of its
com/anies to /artici/ate. The second dri0er came from the /resident of A9
$earing who recogniIed that man, of the issues that were not 0isi+le at the
to/ line were nonetheless e"tremel, 0isi+le at the +ottom line Ce.g., constant
o0ertime, e"/edited deli0eries, signi2cant management inter0ention, e"cess
in0entor,D. All these issues were 0isi+le at the sho/ Loor and 0er, familiar
to those who ran the o/erations side of the +usiness.
In addition to these internal forces, when re/resentati0es of the new /arent
com/an,Ps e"ecuti0e management came to 0isit, the, made se0eral comments
a+out this facilit, utiliIing the /rinci/les of lean manufacturing to im/ro0e
the o/eration. These sources of change were the /rimar, dri0ers +ehind wh,
A9 $earing launched a lean manufacturing initiati0e within their organiIation.
ProCect Background
The lean manufacturing e1ort for A9 $earing oUciall, (ic(ed o1 in Se/tem+er
7===. The /lant manager and his sta1 identi2ed four indi0idual
/roFects to +e im/ro0ed during a one:wee( NaiIen e0ent. The /roFects co0ered
a wide range of to/ics CNan+an, setu/ reduction, cellular manufacturing,
and /roduct LowD. These /roFects were selected +ecause of the +usiness need
to +uild con2dence throughout the organiIation with the use of the NaiIen
7?6
/rocess and to quic(l, /roduce se0eral successful im/ro0ements. $aseline
/erformance target sheets were created for each of the indi0idual /roFects
and demonstrated im/ro0ements were recorded on the sheets.
.ach of these /roFects did achie0e some le0el of success and /ro0ided a
(ic(:start for the lean /rogram. H0er the ne"t se0eral months, more NaiIen
e0ents were scheduled for s/eci2c to/ics such as SM.*, TPM, etc., and /roFect
teams were launched across the factor, to focus on these s/eci2c /roFects. $,
&o0em+er 7===, it was +ecoming o+0ious that after three months of e1ort
on the lean /roFect, not much was changing on the +ottom line. Man, good
things were ha//ening. Peo/le were 2"ing equi/ment, changeo0er times on
machines were coming down, and the manufacturing areas were loo(ing more
organiIed, +ut an, im/act on the +ottom line was diUcult to demonstrate
and this was +ecoming a source of frustration to all em/lo,ees in0ol0ed with
the lean initiati0es.
In an e1ort to /ro0ide focus and demonstrate a +ottom:line im/act, it
was determined that an e1ort should +e launched directl, aimed at the
+earing assem+l, o/eration. A signi2cant o//ortunit, for im/ro0ement
resided in assem+l,, and it was the manufacturing /rocess closest to the
customer. Suoted lead:times to customers were in the neigh+orhood of 5
wee(s, and wor(:in:/rocess in0entor, le0els +etween assem+l, and fa+rication
were a<.; million in Fust com/onent /arts.
A team was selected and dedicated to this lean /roFect for the /ur/ose of
esta+lishing what is called, for all intents and /ur/oses, an assem+l, /roduction
unit. An assem+l, /roduction unit is an organiIation design +ased
around cells. Hwnershi/ for /roduct /erformance is assigned to cells for the
customers the, ser0eM howe0er, ownershi/ is not Jcradle to gra0eK li(e that
of a focused factor,. A focused factor, has ownershi/ from raw materials to
2nished goods. An assem+l, /roduction unit onl, has ownershi/ +ac( to a
wor(:in:/rocess stores location for com/onent /arts. Unli(e de/artments,
which are usuall, organiIed for s/eci2c /rocesses, a /roduction unit has total
res/onsi+ilit,, accounta+ilit,, and authorit, C!AAD for the /roducts from
wor(:in:/rocess stores to the 2nal customer. The teamPs o0erall mission was
to im/lement as man, lean /rinci/les in assem+l, as required to +ring a+out
a +ottom:line change in o/erational /erformance.
In &o0em+er 7===, A9 $earing mo+iliIed this full:time lean team to design,
de0elo/, train, and im/lement a lean manufacturing en0ironment in assem+l,.
7??
This team was sta1ed with three em/lo,ees, all of whom concentrated their
collecti0e energies on the lean initiati0e. To gi0e the /roFect some structure
and a logical sequence for im/lementation, and to generate a /ositi0e
im/ro0ement
as soon as /ossi+le, the, identi2ed the ."cel $earing /roduct famil, as
the 2rst assem+l, area on which to focus their e1orts. The ."cel $earing
/roduct line had +een +rought into the A9 $earing facilit, in Gul, 7=== after
the /lant closure of a sister /lant. The ."cel $earing /art num+ers, tooling,
and qualit, requirements were all unfamiliar to the A9 $earing em/lo,ees.
The manufacturing /rocess documentation was limitedM therefore, the training
of new o/erators was diUcult. In addition, ."cel $earingPs /roduct had
+een set u/ to +e assem+led in a +atch:and:queue mode, not a one:/iece Low
cellM therefore, it was not sur/rising that the ."cel $earing assem+l, lines in
the A9 $earing facilit, were not /roducing at the le0el of out/ut required to
satisf, customer demand. *emonstrated out/ut was a+out 5;44 +earings /er
da, across the four assem+l, lines on two shifts. The required out/ut was ;444
+earings /er da,, and that was not +eing met e0en with o0ertime on Saturda,
and Sunda,. The o+Fecti0e was to de0elo/ and de/lo, a lean manufacturing
en0ironment that was a+le to satisf, a customer demand le0el of <444 units
/er da, o0er a ;:da, wor( wee( without o0ertime.
ProCect Approac$
In the middle of &o0em+er, the lean team recei0ed training on change
management
/rinci/les, team mo+iliIation a//roaches, and /roFect management
fundamentals. It was recogniIed earl, on that the team mem+ers had limited
e"/erience with managing /roFects. It was also a//arent to the team that an
organiIation that did not recogniIe a need for change was not going to +e
eas, to changeM therefore, the team o/ted to follow the structured /roFect
management a//roach outlined in their training.
The team de0elo/ed an agreed:u/on charter and milestone /lan outlining
their /roFectPs sco/e and o+Fecti0es. The team limited the /roFect sco/e to
Fust ."cel $earing assem+l,, and their o+Fecti0es were to achie0e one:/iece
Low manufacturing on the +earing assem+l, lines with im/ro0ed through/ut,
/roducti0it,, reduced qualit, /ro+lems, and reduced in0entor, le0els.
$etween the initial launch of the /roFect in &o0em+er 7=== and -e+ruar,
3444, the lean team had a diUcult time getting started and showed signs of
signi2cant frustration. A formal re0iew of the /roFectPs /rogress unco0ered
the following issuesB
7?@
7. $, conducting a $el+in role assessment on the team mem+ers, it was
learned that none of the team mem+ers had a strong im/lementer
role /reference, which is crucial for a lean manufacturing /roFect. It
was determined that the /roFect leader /referred the role of Js/ecialist,K
which led to diUcult, focusing se0eral of the team mem+ers.
3. The /roFect team was e"/eriencing diUcult, getting launched in a
direction and then sta,ing the course. There was a signi2cant amount
of confusion as to who was to do what and what direction the /roFect
was su//osed to +e ta(ing.
5. The /roFect was +eing controlled in an informal manner, without
regular re/orting and formal status re0iews with the /roFect team.
6. The lean manufacturing /roFect for assem+l, was launched with a
/roFect owner who was not a+le to dri0e the /roFect. !egular re/orting
of /rogress was not requested, and the owner was not reall, engaged
in monitoring the /roFectPs /rogress.
;. The lean team had +een e"/eriencing diUcult, in getting the sho/Loor
o/erators to consistentl, wor( with the lean a//roach. )hen
the lean team was out on the sho/ Loor, the areas could /erform
e"actl, as designed. )hen the team was a+sent, /erformance fell o1.
It was determined that +u,:in and ownershi/ for the new lean manufacturing
design and wa,s of doing +usiness had not reall, ta(en
/lace for those who actuall, owned the /rocess, namel, the sho/Loor
/ersonnel and their su/er0isors.
?. There was a lac( of de2nition as to who had what role and res/onsi+ilit,
for the design, de0elo/ment, and su+sequent im/lementation
of the lean /roFect. This was one of the /rimar, reasons a lac( of
coo/eration e"isted +etween the lean team and the sho/Loor management,
who were the targets for the change.
<. It was diUcult to tell when a cell was actuall, im/lemented. The
criteria for success or targeted le0els of /erformance were not clear,
not communicated, and not trac(ed.
@. It was disco0ered +, the lean team that much of the tooling and some
of the equi/ment +eing utiliIed +, the o/erators were not ca/a+le of
/roducing a good:qualit, /roductM therefore, the /roFect was set +ac(
a few wee(s to identif, and correct the sus/ect tooling.
=. The a0erage num+er of ,ears of A9 $earing wor( e"/erience for frontline
su/er0ision was 35 ,ears. Man, of these front:line managers had
ne0er wor(ed outside the e"isting /lant and therefore were not aware
of an, other wa,s to conduct +usiness.
7@A
After some length, discussion +etween the /roFect team and the steering
committee, the following course of action was decided u/onB
7. The /roFect sco/e should +e e"/anded to co0er the end:state 0ision
for assem+l, and the remaining /roduct lines in assem+l,. The initial
im/lementation e1ort should remain focused on ."cel $earing, +ut
an end:state conce/t should +e de0elo/ed for the assem+l, /roduction
unit. In addition, a ,ear 3444 game /lan for achie0ing the conce/t
needed to +e generated. This schedule was to ha0e assigned actions
with dates and a descri/tion of deli0era+les.
3. A new /roFect owner was to +e assigned who had a greater 0ested
interest in the successful outcome for the /roFect and would dri0e it
to com/letion.
5. The /oor:condition tooling would +e identi2ed and scheduled for
reconditioning in a timel, manner.
6. The lean team was to engage the sho/ foreman C/rocess ownerD in
the design e1orts so that the new /rocess would ha0e +u,:in and the
hando1 during im/lementation would +e seamless. The lean team
was to +e /hased out of the ."cel $earing assem+l, area when the
sho/ too( charge of de/lo,ment. Hnl, after all e"it criteria had +een
satis2ed could the lean team disengage com/letel,.
;. The lean team was to de0elo/ a formal /roFect management /rotocol
for controlling the /roFect +, esta+lishing a war room, meeting on a
regular +asis, conducting /roFect status re0iew meetings, and re/orting
on /erformance metrics regularl,.
?. To engage the entire em/lo,ee wor(force, /articularl, the front:line
su/er0isors, an o0erall lean /roFect announcement was to +e deli0ered
to the entire em/lo,ee /o/ulation.
<. The lean team was to conduct a formal NaiIen e0ent to oUciall, (ic(
o1 the de/lo,ment of the ."cel $earing assem+l, lines and /h,sicall,
mo0e to the sho/ Loor during the im/lementation to show su//ort
for the im/lementation issues.
*uring the month of March 3444, these changes in course for the /roFect
were incor/orated and the results were tremendous. The new /roFect leader
+egan enforcing disci/line with regard to the new lean /rocesses, and
im/ro0ed le0els of /erformance were +eing sustained in the ."cel $earing
assem+l, cells. Metrics were re0iewed in the war room and u/dated on a
wee(l, +asis. The /roFect team met on a +i:monthl, +asis to re0iew /roFect
7@7
status with the steering committee and on a dail, +asis with the /roFect owner
during the im/lementation of an assem+l, cell NaiIen e0ent.
In addition to the shorter term initiati0es, the lean team de0elo/ed an
end:state 0ision for assem+l, and /roduced a game /lan that im/lemented
all /roduct lines in the assem+l, /roduction unit +, the ,ear 3447. These
assem+l, cell designs were +ased on the same /rinci/les as those of the ."cel
$earing assem+l, cells in order to +uild on the lessons learned and e"/erience
gained with the /ilot im/lementation.
ProCect "ime 'ine
Milestone Plan
EHFF JHFF GHFF LHFF
Lean team is
mo+iliIed
'ear 3444
im/lementation
/lan is a//ro0ed
."cel $earing
cells three and
four are sta+le
."cel $earing
cells one and
two are sta+le
7@:
"ec$ni%ues .tili!ed
Program and /roFect
management
mechanisms
hange management ommunications /lanning, reaction to
change, resistors
Team mo+iliIation $el+in roles, conLict management,
decision ma(ing
Lean manufacturing
C-i0e Primar, .lementsD
routing anal,sis
Lean manufacturing
CNaiIen e0entD
Lean manufacturing
C6:da,D
wor(, wor( element anal,sis,
;S house(ee/ing, muda, /rocess
ma//ing, Nan+an, HeiFun(a, Po(a:,o(e,
TPM, H.., +ig si" losses, Fo+ instruction
training, cross:training
7@<
Bene)ts Ac$ie(ed
'essons 'earned
A
Assign true full:time team mem+ers, not a roster of team mem+ers
who still ha0e other res/onsi+ilities. This is critical to sustaining a
common focus.
A
larif, roles with all /roFect /artici/ants so that all /arties agree to
what the, are tr,ing to achie0e, who is to do what, and what success
loo(s li(e when the, get there.
A
.sta+lish a regular, formal /roFect re0iew /rocess earl, in the /roFect
to control the /roFect and (ee/ it on schedule. )hen haIards or sli/s
in the schedule arise, the, must +e escalated according to the /rotocol
and addressed immediatel,.
A
Process owners Cthose who own the /rocess +eing changedD must +e
engaged in the /roFect and commit to the new wa, of doing +usiness
+efore im/lementation.
A
The /roFect owner must +e engaged in the /roFect and has to /ro0ide
the leadershi/ and dri0e for the /roFect to +e successful.
A
The roles and res/onsi+ilities of e0er,one in0ol0ed in the /roFect must
+e de2ned, understood, agreed u/on, and documented.
A
learl, de2ne e"/ectation and /erformance targets at the +eginning
of the /roFect. It is im/erati0e that all /arties in0ol0ed are of one mind
as to what a successful /roFect loo(s li(e and how it is to +e achie0ed.
A
The utiliIation of $el+in team roles can /ro0ide signi2cant insight
into the a//ro/riate structure and /otential wea(nesses of the team
ma(eu/.
Metric Baseline
Act"al
=FGHFF> Target
Parts /er manhour ?.6 @.; 73.4
Production out/ut ;5W <7W 744W
*ail, scheduled hours ?? 6= 64
*efects /er million ?<;@ 3?6? <44
Hn:time deli0er, ;;W @@W =;W
7@=
"estimonials
JI +elie0e changes will ha//en. )e can get some things done.K
BSho)
Manager
J)e ha0e to (ee/ one:/iece Low for qualit,.K
BPlant Manage!ent
JIt is im/ortant to ha0e all areas of the /lant wor(ing toward a common
+ottom:line goal 0s. indi0idual initiati0es.K
Bngineering Manager
J)e disco0er /ro+lems more quic(l,. Production scheduling is easier.
Sualit, is +etter due to the mo0e toward one:/iece Low. )hen we ma(e
a mista(e, onl, a few /arts are a1ected and the /ro+lem is usuall, caught
right awa,. Hne:/iece Low also +rea(s u/ the monoton, of +atch wor(
E I used to +e an assem+ler in the +atch en0ironment. The Nan+an
ensures that we ha0e our /arts a0aila+le when needed. At ."cel, we had
a cri+ attendant that would deli0er our /arts. )e were alwa,s waiting on
/arts.K
BLine Lea&er
JThe Nan+an ma(es it eas, for me to get /arts. The quic(:change tooling
is a good idea. I do not ha0e to loo( for Allen wrenches an,more. La+eled
tooling at the /ress sa0es me time E I donPt ha0e to search for tooling
that is la+eled. I want to do a good Fo+ e0er, da,, +ut I get frustrated
when /ro+lems arise. XIt is diUcult to do four:/iece Low on a line e0en
if we ha0e Fust one /ro+lem X it forces us +ac( in a +atch mode.K
B2)erator
7@5
7>
&ase Study ;:
,ig$3+olume
and 'o-3+olume
&ell ProCect
&ompany Pro)le
ithin a ?4:mile dri0e of Los Angeles is a /roducer of /recision
+earing /roducts called Monitor $earing. Monitor $earing +egan
o/erations at this site in 7=<6. The, ha0e functioned as a nonunion
facilit,, with a//ro"imatel, 3=4 em/lo,ees on the /a,roll. The o/eration
co0ers 344,444 square feet and has followed a more traditional factor,
la,out. The (e, manufacturing /rocesses are cold:forming, screw machining,
grinding su/er:2nishing, and automated and manual assem+l,.
In 7==<, Monitor $earingPs sales /ea(ed at a56 million of to/:line re0enue.
The /rimar, mar(ets the com/an, ser0es are hea0,:dut, truc(, construction,
and industrial. The +alance of their ser0ice /roducts ha0e +een handled
through a cor/orate distri+ution warehouse s,stem. Historicall,, the com/an,
has +een successful at deli0ering to customer needsM howe0er, e0er:increasing
/ricing /ressures, ca/acit, constraints, more stringent /roduct a0aila+ilit,
requirements, and customer change orders ha0e +een ma(ing it diUcult for
Monitor $earing to continue o/erating in the same manner as the, had in
the /ast. .1orts had recentl, +een made to de/lo, continuous im/ro0ement
initiati0es within the facilit,, +ut these met with limited success. .0en though
some in0estment in ca/ital had +een made and the com/an, achie0ed some
*
7@>
+ene2t, from a traditional cost:sa0ings /ers/ecti0e, the, had ,et to realiIe an,
+ene2t from the in0estment in a lean manufacturing initiati0e.
4ri(ers for &$ange
Hne of Monitor $earingPs maFor customers /urchased se0eral high:0olume
+earings for its truc( transmission manufacturing o/eration. -or as long as
the, had +een in +usiness together, this customer had /laced orders with
Monitor $earing in a 0er, lum/, demand /attern +ut alwa,s with 73: to
7?:wee( 2rm schedules. )ithin a relati0el, short time /eriod, though, the
H.M customer switched from a traditional 2rm 2"ed schedule to a demand
for /arts +ased on a scheduled 2nal assem+l, sequence. This, in turn, caused
schedules to change dramaticall, from 73 to 7? wee(s 2rm 2"ed to @ da,s
2rm with changes and the Le"i+ilit, necessar, to accommodate wee(l,
adFustments, which were at times quite signi2cant. Their demand /attern
characteristicall, had large quantities at the +eginning of the month and
then little at the end of the month. These dramatic changes in demand
+eha0ior /atterns created ha0oc on the /roduction Loor, not to mention the
fact that it was a more costl, wa, in which to conduct +usiness. Soon after
the schedule changes, the customer +egan /ressuring the com/an, a+out its
unit costs and /roduct a0aila+ilit,. In addition to this e"ternal force for
change, there was an internal force as well. A new /arent com/an, was
launching a strategic im/ro0ement initiati0e aimed at reducing costl, waste
CJmudaKD throughout all of its facilities and was e"/ecting all of its com/anies
to /artici/ate. The com+ination of these two dri0ers, one internal and
one e"ternal, is what dro0e Monitor $earing to em+ar( on a new a//roach
to manufacturing.
ProCect Background
Monitor $earing had a 0ariet, of /roduct:demand 0olumes for its 0arious
/roduct lines. Some of the /roducts demonstrated a 0er, high demand 0olume
Ce.g., 5444 units /er da,D, and some a 0er, low demand 0olume Ce.g.,
3444 units /er ,earD. To de0elo/ some momentum for their im/ro0ement
initiati0e and to arrest the deterioration of the relationshi/ with one of their
/rimar, customers, Monitor $earing decided their highest 0olume /roduct
line should +e the 2rst area attac(ed. This would gi0e them a chance to
7@6
channel their energies on one s/eci2c /roduct famil, and de/lo, the lean
techniques rather quic(l,.
.0en though the, realiIed demonstrated +ene2ts from a//l,ing lean
manufacturing techniques to the high:0olume /roducts, the, recogniIed
that this focus on high:0olume /roduct lines onl, im/acted a+out 54W of
salesM therefore, the, needed to in0estigate other o//ortunities as well. This
meant ste//ing +ac( and loo(ing at the demand /atterns of all their enditem
/roducts and segregating them +, some common factor C0olume, mar(et,
customer, material, etc.D. In doing so, the com/an, concluded that, for
their manufacturing en0ironment, the most a//ro/riate choice would +e to
sort the /roducts +, /roduct siIe 2rst and then +, 0olume, which was
de/endent on equi/ment ca/a+ilities. $, doing so, the, were a+le to di0ide
their entire end:item assem+l, area into four maFor /roduct familiesB C7D
high:0olume +earings, C3D medium: to low:0olume +earings, C5D larger siIe
+earings, and C6D low:0olume ser0ice. The high:0olume +earings encom/assed
nine end:item +earingsM the medium: to low:0olume +earings, ?<
end:item +earingsM the large siIe +earings, o0er 644 0arious end:item +earingsM
and the low:0olume ser0ice, in e"cess of ;44 end items. This segregation
of /roduct +eha0iors allowed the com/an, to design and manage the Low
of material through assem+l, according to the demand +eha0ior its the
/roducts.
Initiall,, the o0erall /roFect sco/e and o+Fecti0es for the lean im/ro0ement
initiati0e at Monitor $earing were /rett, much unde2ned. The com/an,
(new that the, had to achie0e im/ro0ed /erformance and that the, had to
engage themsel0es with the /arent com/an,Ps strategic e1ort to eliminate
waste. It was Fust a matter of understanding the tools and ha0ing the
organiIation
required to ma(e the change.
Monitor $earing (new the, were e"/eriencing diUcult, with one s/eci2c
customer and that the lean tools and techniques the, were learning a+out
would +e a//lica+le to an, of the high:0olume cells. So, in an e1ort to
esta+lish a course and set a direction for the com/an,, Monitor $earingPs
general manager formulated a target o+Fecti0e in Ma, for three of the identi2ed
high:0olume cellsB JIn0entor, turns of 73 are to +e achie0ed +, each
of these cells +, the end of the ,ear b*ecem+er 7===c. After the end of the
,ear, we will determine a /lan of action for the +alance of the /roducts.K
7@?
ProCect Approac$
Monitor $earing oUciall, (ic(ed o1 their e1orts in Gune 7===, with four
NaiIen e0ent /roFects Corder entr,, su//lier Nan+an, cellular manufacturing,
and /roduct LowD. These /roFects were selected +ecause the, centered around
a need to streamline the Low time from customer order to shi/ment for
high:0olume +earing /roducts that were currentl, in /roduction. Monitor
$earing was facing signi2cant cost reduction and on:time deli0er, /ressures
from its /rimar, customer and needed to demonstrate im/ro0ement quic(l,.
*uring the course of the e0ent, each of these /roFects did achie0e 0ar,ing
le0els of success and /ro0ided the (ic(:start necessar, for the lean im/ro0ement
initiati0e at Monitor $earing. The high:0olume +earing cell was a+le
to achie0e a signi2cant im/ro0ement in out/ut from +etween 7344 and 7;44
units /er da, to the 3444 /er da, that were required. The, achie0ed this +,
anal,Iing the Low of material, understanding the wor( content, and +alancing
the wor( +etween stations. In addition, +, im/lementing small +atch
Low and Nan+an /ull, the, were a+le to not onl, im/ro0e in0entor, turns
from ;.5 to 73.5 +ut also arrest a nagging qualit, /ro+lem that was causing
them to lose around a;444 /er month in the form of scra//ed /arts.
As the following months /assed, more NaiIen e0ents were scheduled and
im/ro0ement teams launched across the factor,. A tremendous amount of
acti0it, ensued around /lant:wide 0isual communication of conce/ts, team
accom/lishments, ;S house(ee/ing, equi/ment clean:u/, and im/lementation
of Nan+an re/lenishment for man, of the /urchased and manufactured
/arts in +oth assem+l, and fa+rication. Some /lant:wide e1orts were initiated
relati0e to single:minute e"change of dies CSM.*D, which focuses on reducing
changeo0er time, and total /roducti0e maintenance CTPMD, which focuses on
the reduction of un/lanned downtime on equi/ment.
$, Se/tem+er 7===, it was +ecoming e0ident that the ne"t areas of
im/ro0ement within the facilit, were going to +e more com/le" and that the
NaiIen /roFects a//roach of Jislands of acti0it,K used so far was not going
to address some of the more su+stantial +usiness issues necessar, for success.
So, Monitor $earing announced the de/lo,ment of a full:time lean team to
focus on the design, de0elo/ment, and de/lo,ment of an o0erall lean
en0ironment
for the com/an,. This team was sta1ed with half a doIen em/lo,ees
who concentrated their collecti0e energies on lean manufacturing acti0ities.
As the lean team +ecame more /ro2cient with the lean tools and techniques,
it was time to +egin ma(ing /lans to address the ne"t areas of o//ortunit,
within the +usiness, namel, the lower 0olume and higher mi" /roduct
families.
7@@
In Ganuar, 3444, the lean steering committee held a formal re0iew to
assess the /rogress on the lean im/ro0ement initiati0es to date and to /lot
a course for the ne"t ,earPs acti0it,. The organiIation had made great strides
in the area of in0entor, reduction, in0entor, turns, and scra/ reduction with
their high:0olume cells during the /re0ious ,ear, and the, had increased
their out/ut ca/a+ilit, +, 3;W. The amount of customer orders running
+ehind schedule had +een reduced to 0irtuall, nothing. Howe0er, among all
these signi2cant achie0ements, it was recogniIed that there were still a few
outstanding issues that should +e addressed +, the lean team +efore tac(ling
the lower 0olume /roduct lines. After length, discussion +etween the lean
team and the steering committee, the following course of action was agreed
u/onB
7. Loc( down, +utton u/, and institutionaliIe the changes made to this
/oint. Se0eral (e, changes had +een made to the o/eration, +ut the,
had +een neither well documented nor com/letel, understood +, all
the /eo/le in0ol0ed with the change.
3. *e2ne what a com/leted cell loo(s li(e. There were 0ar,ing o/inions
as to when a cell im/lementation was com/lete, there+, lea0ing some
to feel it was time to mo0e on while others felt there was more to do.
This de2nition of a cell would lead to the esta+lishment of an Je"it
criteriaK for the cell, or quantitati0e and qualitati0e elements necessar,
for the cell to +e im/lemented.
5. .sta+lish an im/lementation a//roach that would de/lo, the identi2ed
/rinci/les of a cell in stages, the conce/t here +eing to incor/orate
the foundation /rinci/les of the cell in stage one and then come +ac(
at a later date to im/lement the /rinci/les necessar, to +ring a+out
a new le0el of o/erational /erformance in stage two.
6. Assign a factor, manager to manage the high:0olume /roducts of the
cell. Su/er0isors were assigned across de/artments, which made it
diUcult to de2ne ownershi/ for /roduct /erformance and there+,
generate continuous im/ro0ement.
;. *etermine a time line for de/lo,ing the a+o0e:mentioned actions
and de0elo/ a game /lan for designing and im/lementing the lower
0olume/higher mi" cells.
In -e+ruar, 3444, the lean team concentrated on documenting the new
/rocesses in the high:0olume cells, esta+lishing a common de2nition for a
successfull, im/lemented cell, and determining the e"it criteria required for
a cell to +e considered sta+le. The steering committee too( on the action
:AA
item to wor( with management on selecting the a//ro/riate /eo/le to +e
cell leaders for the new lean en0ironment. Hnce these identi2ed /rinci/les
were im/lemented and in /lace for a+out 6 to ; wee(s, the cells +egan to
e"hi+it new le0els of /erformance, which /a0ed the wa, for /lanning the
low: to medium:0olume cell. The team addressed this cell di1erentl, than
the high:0olume cells, which hadB
7. A limited quantit, of end:item /art num+ers to deal with
3. The same manufacturing /rocesses in0ol0ed with each /roduct
5. A 0er, consistent o/erational time from /art to /art at each station
6. A relati0el, consistent customer:demand /attern from month to
month
;. A limited quantit, of high:0olume com/onents to Nan+an
In contrast, the low: to medium:0olume /roducts hadB
7. ?< di1erent end:item /art num+ers
3. *i1erent manufacturing /rocesses and equi/ment, de/ending u/on
the end:item con2guration and /art siIe
5. H/erational times that were relati0el, consistent from /art to /art at
each station, +ut required setu/ times at each station ranging an,where
from 54 minutes to 6 hours for changeo0er +etween /roduct lines
6. A /roduct:demand +eha0ior that 0aried from 7344 /er da, to ; /er
da,, with an order frequenc, /attern from e0er, wee( to once /er
quarter
;. A wide range of com/onent /arts with 0ar,ing quantities de/ending
on the end:item mi", with some of the com/onent /arts +eing used
in multi/le end items
?. A signi2cantl, greater num+er of machines and assem+l, com/le"it,
The lean team followed a structured methodolog, for cell design which
ca/tured detailed data a+out the e"isting low: to medium:0olume /roduct
famil,. Using this methodolog, allowed them toB
7. alculate demand quantities /er da, in order to esta+lish runner,
re/eater, and stranger /roduct +eha0iors for low: to medium:0olume
/roducts.
3. .sta+lish material and wor( Low /atterns +, ma//ing the /rocess
and identif,ing 0olume /ercentages +etween stations.
:A7
5. #erif, if an, of the e"isting /roduct routings had +ac(trac(ing or a
re0erse Low of material.
6. a/ture wor( content times to understand 0ariations +etween /roducts
and +etween wor( stations that were designated for the cell.
;. 9enerate wor( loads on equi/ment to see what and how man,
machines were needed for the cell.
?. *etermine ta(t time for each of the /roducts and in total for the cell.
$, re0iewing the demand /attern, the, could calculate a designed
dail, /roduction rate to accommodate 0ariation for runner and
re/eater /roducts.
<. Understand how much of an im/act e"isting setu/ times would ha0e
on scheduling the mi" of /roducts.
@. *esign an a//ro/riate hard:signal Nan+an re/lenishment s,stem to
allow for the right raw materials/com/onents +eing a0aila+le in the
right quantities at the right location.
The 2nal design /roduced the following resultsB
7. .qui/ment was com/rised of 34 grinders and three assem+l, methods.
3. !oles and res/onsi+ilities o0er the entire o/eration Cfrom wor(:in/rocess
stores to grinding, +oring, 2nal assem+l,, /ac(aging, and
shi/mentD were de2ned and clari2ed.
5. !unner /roducts were dedicated to a /articular set of equi/ment and
+uilt to a dail, rate.
6. !e/eater /roducts were shared across common equi/ment and +uilt
on demand to a re/lenishment Nan+an from shi//ing. The /riorit,
for Nan+an orders was 2rst:in/2rst:out C-I-HD. a/acit, was allocated
+ased in the designed dail, /roduction rate.
;. &ew equi/ment was assigned to /ro0ide for 34W growth in this segment
to accommodate for ser0ice and lead:time reduction o+Fecti0es.
?. Stranger /roduct orders were +undled o0er a 3:wee( /eriod of time
and scheduled to run twice a month across all a0aila+le equi/ment
in the cell. $ecause these /roducts were not sold +ased on lead:time
or unit /rice, the, did not require the immediate turnaround of the
runner and re/eater /roducts.
:A:
ProCect "ime 'ine
"ec$ni%ues .tili!ed
Milestone Plan
MH@@ AH@@ ?FH@@ ??H@@ F?HFF FGHFF
High0olume
cell
NaiIen
e0ent is
initiated
om/letion
of
54:da,
to:do list
Lean team
is
launched
Third high0olume
cell is
o/erational
Low: to
medium0olume
/roFect is
launched
Low: to
medium0olume
cell
design is
com/lete
Lean manufacturing
C-i0e Primar,
.lementsD
sho/Loor metrics, ser0ice cell agreements, mi"model
manufacturing, P/S anal,sis, /roductfocused
routing anal,sis
Lean manufacturing
CNaiIen e0entD
Hne:/iece Low, ta(t time, /ercent loading chart,
Nan+ans, material /ull, ;S house(ee/ing, 0isual
controls, /ro+lem +oards, sho/Loor metrics,
/rocess ma//ing, SM.*, TPM, Po(a:,o(e
Lean manufacturing
C6:da,D
s,stems, standard wor(, wor( element anal,sis,
;S house(ee/ing, muda, /rocess ma//ing,
Nan+ans, HeiFun(a, Po(a:,o(e, TPM, H.., +ig si"
losses, Fo+ instruction training, cross:training
ell design P/S anal,sis, /rocess ma//ing, routing anal,sis,
ta(t calculation, wor(load +alancing, Nan+an
siIing, standard wor(, one:/iece Low
:A<
Bene)ts Ac$ie(ed
'essons 'earned
A
.sta+lish a full:time /roFect team to dedicate the resources necessar,
to focus on and /ro0ide su//ort for the integration requirements
necessar, with an initiati0e that is managing multi/le as/ects of lean.
A
larif, e"/ectations earl, in the /roFect so that all /arties (now what
the, are tr,ing to achie0e and what success loo(s li(e when the, get
there.
A
!ecogniIe that di1erent /roduct +eha0iors dri0e di1erent manufacturing
architectures, a fact that a1ects equi/ment la,outs, scheduling,
/lanning and control methodologies, the num+er of /arts to Nan+an,
Nan+an quantities, the focus for continuous im/ro0ement, etc.
Matching the /roduct:demand +eha0ior with the a//ro/riate manufacturing
architecture allows for the most e1ecti0e /erformance of
/roducts to the customer.
Metric Baseline
Act"al
=?EHFF> Target
,ig$3+olume P7
In0entor, dollars a6@6,444 a36@,444 a644,444
In0entor, turns ;.; 73.5 73
Hn:time deli0er, 64W @4W =4W
Scra/ /ercent 5.<W 7.;W 3.4W
,ig$3+olume P:
In0entor, dollars a64<,444 a344,444 a5;4,444
In0entor, turns =.; 34 73
Hn:time deli0er, 55W @@W =4W
Scra/ /ercent 5.<W 7.3W 3.4W
,ig$3+olume P<
In0entor, dollars a55;,444 a7444 a344,444
In0entor, turns 6.3 @.; 73
Hn:time deli0er, 55W ?;W =4W
Scra/ /ercent 4.@W 4.<W 7.4W
:A=
A
Select cell leaders who ha0e res/onsi+ilit,, accounta+ilit,, and authorit,
C!AAD for the im/lementation and ownershi/ for /erformance of
the cells after de/lo,ment.
A
.sta+lish an e1ecti0e TPM /rogram for a focused factor,/cell, critical
when manufacturing equi/ment is in0ol0ed.
A
Nee/ designs for one:/iece or small:+atch Low cells sim/le for 0isual
and conce/tual understanding.
A
In0ol0e su//liers and manufacturing equi/ment su//liers in the
design of Nan+an and TPM /rograms to increase commitment to the
/rocess changes.
A
Nee/ all shifts in a multi:shift en0ironment in0ol0ed, or gains will +e
su+o/timal.
"estimonials
JLean manufacturing is a /owerful tool, not onl, for achie0ing /erformance
gains unheard of in traditional s,stems, +ut also for gi0ing em/lo,ees
tools that im/ro0e morale, the team en0ironment, and a sense of
accom/lishment.K
BLean Steering Co!!ittee
J*o not underestimate the /ower of communicating lean accom/lishments
to ,our customer X it tells them ,ou are controlling ,our costs and dis/la,s
,our commitment to organiIational e"cellence.K
BGeneral Manager
JIt ta(es more than techniques to dri0e this (ind of changeM it ta(es
leadershi/.K
B%actory Manager
G'SSARY
:A6
Glossary
ABC !aterial han&ling.
The segregation of material +ased on re/lenishment
lead:time, 0alue, and /art com/le"it,. This is done to align /lanning and
control a//roaches with certain t,/es of /arts for +est utiliIation of
resources. &ot all /arts are created equal.
A"tono!ation.
H1ers the a+ilit, to se/arate man and machine, +ecause such
equi/ment has the ca/a+ilit, to automaticall, shut down when it detects
a defect or a+normalit,. The machine sta,s shut down until a human +eing
inter0enes, sol0es the /ro+lem, and starts the machine again.
Back N"shing.
The deduction from in0entor, records of /arts consumed in
an assem+l, when the item is either +oo(ed into 2nished goods or sold.
Block layo"t.
A high:le0el 0iew of the factor,, where square footage has +een
allocated, or J+loc(ed,K for s/eci2c areas. A general descri/tion of what
will ha//en in the area is understood in order to assist with the de0elo/ment
of material and information Low in the future design.
Cell =)ro&"ct cell>.
A clearl, focused entit, with the assigned resources necessar,
for it to control its own o/erational /erformance and satisf, customer
requirements for its gi0en /roducts.
ell la,out. A gra/hical re/resentation of the equi/ment//rocesses in a cell,
t,/icall, in a U:sha/e, with +oth the o/erator and material Low dis/la,ed.
Cell lea&er.
The indi0idual selected to lead the da,:to:da, acti0ities within a
cell. It can +e either a direct or indirect la+or em/lo,ee, de/ending on the
le0el of cell com/le"it,, t,/es of decisions to +e made, and ca/a+ilit, of
the wor(force.
:A?
Cell tea! work )lan.
A documented schedule CcalendarD of acti0ities for the
wee( within a cell. It la,s out the game /lan and /ro0ides a common
understanding for all cell mem+ers as to what e0ents should ta(e /lace
each wee(.
Cell workloa& analysis.
An assessment of the e1ect of wor(load on equi/ment
and /rocesses in the cell to assure ca/acit, to +uild future requirementsM
includes an anal,sis of the /roduct demand +eha0ior.
Co!!"nication )lan.
A structured /rocess +, which communication is to
ta(e /lace throughout the organiIation. It includes a de2nition and
descri/tion as to what message will go to whom when and +, what method.
Co!)le0 !i0 )ro&"ction sche&"ling.
The same as HeiFen(a. The esta+lishment
of a le0el demand /attern sequence +ased on the mi" of re/etiti0e orders
from the customer. -or e"am/le, if demand was for 744 A units, ;4 $
units, and ;4 units, then the HeiFen(a /attern would +e A, $, A, , A,
$, , $, X .
Conce)t &esign.
The 2rst stage of the future state design /hase. once/t design
esta+lishes the high:le0el 0iew of what the o/eration will loo( li(e when
the lean /rogram is im/lemented. It /ro0ides the foundation for detail
design.
Contin"o"s i!)rove!ent tools.
#er, sim/le tools that can +e utiliIed +, all
em/lo,ees to identif, and eliminate waste in their /rocess C20e wh,s,
histograms, cause:and:e1ect diagrams, frequenc, charts, Pareto diagrams,
etc.D.
C)5.
An inde" measure of the ca/a+ilit, of a /rocess to consistentl, /roduce
/arts. It com/ares the /rocess width Cstandard de0iationD with the s/eci2cation
width and location.
Cross6training.
.m/lo,ees in a /rocess +eing trained to /erform multi/le
ste/s within the /rocess, /refera+l, all the ste/s.
C"rrent state ga) )hase.
The second /hase in the lean manufacturing /rogram,
it is designed to ca/ture current o/erational /erformance, to lead
to an understanding of the maFor o/erational /rocesses as the, are toda,,
and to identif, root causes as to wh, /erformance is what it is.
C"sto!erHs"))lier align!ent.
*ocumenting and understanding all the customer
and su//lier relationshi/s that e"ist for /art Low in the factor,. It
in0ol0es identif,ing each /art and recording where it comes from and who
it goes to in order to esta+lish clear customer/su//lier alignment.
Glossary
:A@
Cycle ti!e =o)erational>.
The time required to com/lete one full c,cle of an
o/eration. An o/eration is a su+set of a /rocess.
Cycle ti!e =)rocess>.
The time required to com/lete one full c,cle of a /rocess,
made u/ of se0eral o/erations.
1esign &aily )ro&"ction rate.
The /roduction rate de0elo/ed in order to satisf,
customer demand. It ta(es into account the customer forecast and 0ariations
in that forecast. The cell is designed to /roduce at that rate for a
gi0en time frame.
1etail &esign.
The second stage of the future state design /hase. *etail design
anal,Ies what each indi0idual cell requires for im/lementation during the
NaiIen e0ents E items such as ta(t time, equi/ment, demand mi", /otential
la,out and staUng, routing anal,sis, etc.
1%MA =&esign *or !an"*act"ring an& asse!bly>.
A /roduct de0elo/ment
a//roach that in0ol0es multi/le functions concurrentl, throughout the
de0elo/ment /rocess to ensure all requirements are ca/tured. It also
focuses, through the use of good lean design /ractices, on designing a
/roduct that is /roduction friendl, with a 0iew toward reducing recurring
total costs.
0it criteria.
Suantitati0e and qualitati0e measures that are 0isi+le and can
clearl, show that success has +een achie0ed. ."am/les of quantitati0e goals
would include =@W on:time deli0er,, manufacturing lead:time of 3 da,s,
/roducti0it, of @=W. ."am/les of qualitati0e goals would include ha0ing
all A /arts on Nan+an, documentation of o/erating rules, ;S chec(lists,
communication +oards, training matri", /osted metrics, etc.
%inishe&6goo&s variation.
A calculated le0el of 2nished goods +ased on
demand 0ariation and ser0ice le0el required. This 2nished:goods in0entor,
is usuall, used for /roducts utiliIing Nan+an re/lenishment with Iero
customer tolerance on deli0er,.
%ive Pri!ary le!ents.
A design and im/lementation a//roach that re/resents
20e /rimar, facets of lean manufacturing. An a//roach that asserts
that all facets are required in order to su//ort and sustain a solid lean
LS =ho"sekee)ing>.
A structured, 20e:ste/ a//roach to house(ee/ing that
engages +oth management and em/lo,ees in the /rocess. It is a matter of
sifting, sorting, swee/ing, standardiIing, and sustaining the wor( en0ironment.
:7A
%le06*ence &e!an& !anage!ent.
A /lanning and control technique where+,
customer demand is released to the cells through a set of o/erating rules
agreed u/on +, mar(eting and manufacturing.
%MA =*ail"re !o&es an& e9ect analysis>.
A technique where+, ris(s in the
/rocess are anal,Ied for /otential failure +ased on their e1ect and the
required function of an item.
%"t"re state &esign )hase.
The third /hase in the lean manufacturing /rogram,
it is s/lit into two stages. The 2rst is conce/t design, and the second is
detail design. In addition, this /hase includes the im/lementation /lan,
transition strateg,, and /lant communication for the /rogram rollout.
Gra)hic work instr"ctions.
A gra/hical re/resentation of wor( instructions
including wor( sequence, wor( content, 0eri2cation chec(s, and source
ins/ections.
(olistic !an"*act"ring.
A 0iew that there is interconnecti0it, and de/endenc,
among the -i0e Primar, .lements and that each element is critical and
required for the successful de/lo,ment of a lean manufacturing /rogram.
(oshin )lanning.
A strategic decision:ma(ing tool that focuses com/an,
resources on a few Cthree to 20eD critical initiati0es within the +usiness
and aligns these initiati0es from to/ to +ottom throughout the organiIation
0ia s/eci2c goals, /roFect /lans, and /rogress re/orting.
8!)le!entation )lan.
The schedule of e0ents for im/lementing the lean manufacturing
/rogram. It includes a sequence of NaiIen e0ents, deli0era+les,
!AA, duration, etc.
5ai3en event.
A time:+o"ed set of acti0ities carried out +, the cell team during
the wee( of a cell im/lementation. These acti0ities include training, /lanning,
design solutions, de/lo,ment, documentation, demonstrating /erformance,
etc. The NaiIen e0ent is the im/lementation arm of a lean
5anban.
A demand signal from the customer, the authoriIation to +egin
wor(. It controls the le0el of wor( in /rocess and lead:time for /roducts.
It facilitates immediate feed+ac( on a+normalities.
Lean assess!ent )hase.
The 2rst /hase in the lean manufacturing /rogram,
it co0ers the initial assessment of the le0el of leanness of the +usiness. It
gathers e"ternal information to esta+lish design criteria and determine
mar(et o//ortunities.
Glossary
:77
Lean !an"*act"ring a"&it.
The result of re0iewing a cell im/lementation to
/ro0ide feed+ac( through a standard scoring /rocess to indicate the le0el
of de/lo,ment achie0ed.
Lean roa& !a).
The clari2ed statement, understood +, all those in0ol0ed, of
the o0erall direction and ste/s or /hases required for a /articular lean
Level loa&ing.
*esigning a le0el load of demand for a gi0en cell in order to
accommodate the mi" of /roducts required for that cell C+ased on /roduct
0olume and wor( contentD.
Line sto).
Authorit, gi0en to an o/erator to shut down the line and not
/roduce an, more /roduct if a defect is found in the /rocess.
Loa&ing chart.
A chart used in conFunction with ta(t time to esta+lish wor(load
+alance for the wor( content elements of a gi0en cell and its /roduct
mi".
Logistics ele!ent.
The element that /ro0ides a de2nition for o/erating rules
and the mechanisms for /lanning/controlling the Low of material.
Lot si3e s)litting.
*i0iding a lot into su+:lots to accommodate simultaneous
/rocessing of an order.
Make6to6or&er )ro&"ction.
A /roduction architecture where /roducts are
made after the recei/t of a customer sales order.
Man"*act"ring Now ele!ent.
The element that addresses /h,sical changes and
design standards to +e de/lo,ed as /art of the cell.
Man"*act"ring lea&6ti!e.
The ela/sed time +etween when an order is released
for /roduction and the item is deli0ered into 2nished goods.
Man"*act"ring strategy.
A collecti0e (nowledge of the +usiness that contains
current com/etiti0e ad0antages and wea(nesses, identi2es mar(et o//ortunities,
and includes the associated manufacturing o+Fecti0es necessar,
to align with these o//ortunities.
Material )lanningHcontrol.
The o/erating rules and s,stems su//ort used for
/lanning and controlling the Low of material to, through, and from one
cell to the another.
Material )"ll =inter6cell>.
A /ull s,stem for re/lenishing material within a cell.
Material )"ll =intra6cell>.
A /ull s,stem for re/lenishing material +etween
cells.
:7:
Metrics ele!ent.
The element that addresses 0isi+le results:+ased /erformance
measures with targeted im/ro0ements and team rewards and recognition.
Milestone )lan.
A tool that identi2es maFor segments of a /roFect, the time
frame, sequence of maFor e0ents, and associated management de+riefs.
Mi06!o&el !an"*act"ring.
The a+ilit, to /roduce an, /roduct, an, quantit,,
an, time in order to res/ond to customer demand on a dail, +asisM designing
a manufacturing cell that can /roduce an, mi" or 0olume of /roducts
on an, gi0en da,.
M"&a.
Ga/anese word for waste, or non:0alue:added.
/on6re)etitive 5anban.
A Nan+an that is used for one:o1 or low:0olume
/roducts. It is introduced into the manufacturing /rocess when there is a
s/eci2c demand for a /roduct. The signal is sent to the su//lier for a
quantit, to 2ll the demand. After it has +een consumed, it is ta(en out of
the re/lenishment c,cle until it is needed again.
2 =overall e-"i)!ent e9ectiveness>.
A function of scheduled a0aila+ilit,
equi/ment /roducti0it,
/rocess ,ieldM used to understand the e1ecti0eness

of equi/ment.
296loa&ing.
Sending wor( to an outside su//lier for a s/eci2c o/eration or
set of o/erations due to a short:term ca/acit, de2cit.
2ne6level B2M.
All com/onent /arts are at the same le0el in the +ill of
material, with no su+:assem+lies, no Jgoes intoK relationshi/s, no leadtime
o1set, no structured $HM.
2ne6)iece Now.
Producing one /art at a time at an o/eration and /assing it
on to the ne"t o/eration after ha0ing recei0ed a demand signal.
2)erating r"les.
&ew documented rules for o/erating the cell as designed
CNan+an card s,stem, ca/acit, loading to =4W, incoming/outgoing material
handling, wor(a+le wor(, recording setu/ times, dail, equi/ment
chec(s, line sto/, etc.D.
2)erational roles an& res)onsibilities.
*ocumented e"/ectations for indi0idual
/ositions descri+ing what the, are accounta+le to accom/lish, s/eci2c
duties to +e /erformed, to whom the, re/ort, +oundar, of res/onsi+ilit,,
direct re/orts, etc.
2rgani3ation ele!ent.
The element that focuses on the identi2cation of /eo/lePs
roles and functions, training in the new wa,s of wor(ing, and communication.
Glossary
:7<
Pareto.
The conce/t that a small /ercentage of a grou/ has the most im/act.
Poka6yoke.
A mista(e:/roo2ng de0ice or /rocedure used to /re0ent defects
from entering a wor( /rocess.
Policy &e)loy!ent.
See Hoshin /lanning.
Process control ele!ent.
The element that is focused on the monitoring, controlling,
sta+iliIing, and /ursuit of wa,s to im/ro0e the /rocess.
Process !atri0.
The gra/hical re/resentation on a grid, with the manufacturing
/rocess across the to/ and /art num+ers down the side. Part Low is
drawn inside the grid and used to re0eal /atterns of commonalit,, resource
consum/tion, and re0erse /art Low.
Pro&"ct6&e!an& behavior analysis.
The segregation of /roducts into one of
three categories Crunner, re/eater, and strangerD +ased on their /roductdemand
+eha0iors.
Pro&"ct6*oc"se& !"lti&isci)line& tea!.
A team of /eo/le re/resenting 0arious
functions within the organiIation, all of whom are focused on im/ro0ing
the end:/roduct /erformance of a gi0en set of /roducts, no matter how
man, de/artmental lines those /roducts cross.
Pro&"ct gro")ing.
The segregating of end:/roduct demand items CSNUsD in
grou/ings, +ased on de2ned criteria.
Pro&"ctH-"antity assess!ent.
The P/S anal,sis tool loo(s for natural +rea(s
for /roduct grou/ings +, sorting the gathered data and determining a 2t
for /roduct cells +, their associated 0olumes and the /roduct alignment
characteristics.
ProKect charter.
A tool that de2nes and clari2es managementPs e"/ectations
in regard to the /ur/ose, o+Fecti0es, and e"/ected outcome of a /roFect.
This document must +e agreed to and signed o1 on +, all /arties +efore
a /roFect can +egin.
RAA =res)onsibility, acco"ntability, a"thority>.
Im/lies com/lete ownershi/
for a deli0era+le, or a /rocess, or a /erformance outcome. An indi0idual
Cone /ersonD is answera+le for all as/ects of this assignment. This /erson
ma, delegate tas(s +ut does not share the rose that has +een /inned to his
or her la/el.
Rate6base& sche&"le.
Used to esta+lish the /roduction quantit, for rate:+ased
/roducts in a gi0en cell. It is determined +, esta+lishing a dail, +uild
quantit, from +oth forecasted and +oo(ed orders, which then +ecomes
the wor( schedule for the cell.
:7=
Re)eater.
These /roducts ha0e signi2cant 0ariet, and will usuall, +e /roduced
across resources that are not dedicated to a s/eci2c Low line. *ue to the
lower 0olume amounts, 0aria+le order frequenc, and/or high 0aria+ilit,
in o/erational routings, these /roduct:demand /atterns will ha0e to +e
managed as mi":model /roduct and will require more /roduction control
su//ort than a runner t,/e of /roduct.
Ro"ting analysis.
The categoriIation of /roducts +ased on their /rocess Low,
wor( content, and 0olume to determine the most e1ecti0e wa, to manage
them in a cellular manufacturing en0ironment.
R"nner.
These /roducts are ordered in high 0olumes frequentl, from customers
and ha0e relati0el, sta+le demand /atterns. The are often managed
as rate:+ased /roducts and dedicated to s/eci2c cells.
Segregate& )ro&"ction sche&"ling.
The grou/ing of /roducts around constraints
Ce.g., changeo0erDM for e"am/le, all A /roducts are scheduled to
run on 2rst shift, while $ and /roducts are run in sequence during the
second shift due to a 3:hour changeo0er time +etween mi"es.
Service cell.
In contrast to a /roduct cell, a ser0ice o/eration is focused on
turnaround time and deli0er, relia+ilit, to the customer. Ser0ice cells do
not ha0e !AA for /roducts +ut are held accounta+le for their /erformance
to /roduct cells.
S8P2C =s"))lier6in)"t6)rocess6o"t)"t6c"sto!er>.
A /rocess:ma//ing methodolog,
used to ca/ture a /rocess, its out/uts, and the associated in/uts
that triggered the /rocess, in addition to identif,ing the customer of the
out/ut and the su//lier of the in/ut. It also collects information a+out
the /rocess, such as lead:time, 0olume, deli0er,, qualit, /erformance, etc.
SM1 =single6!in"te e0change o* &ies>.
A structured im/ro0ement methodolog,
for reducing changeo0er downtime on equi/ment to less than 74
minutes.
SPC =statistical )rocess control>.
The use of statistics and data gathering to
monitor /rocess out/ut and to control the qualit, of the /rocess.
Stan&ar& work.
*ocumentation of the agreed:u/on, one +est wa, to /roduce
a /roduct. It ser0es as the communication, training, and /rocess im/ro0ement
tool for the cell. It can include such information as c,cle time, ta(t
time, designed le0el of wor( in /rocess, o/erator Low sequence, material
Low sequence, staUng, etc.
Stranger.
These /roducts are the miscellaneous items that are +eing /roduced
within the /lant as one:o1 items or ha0e a 0er, low:0olume or infrequent
Glossary
:75
Conce /er ,earD demand /attern. These items are usuall, +est managed
through M!P and can +e segregated from the rest of the factor,.
Takt ti!e.
The rh,thm or +eat of demand for the cell. It re/resents the rate
of consum/tion +, the mar(et/lace and is +ased on the scheduled time
a0aila+le for the cell di0ided +, the designed dail, /roduction rate for the
cell.
TPM =total )ro&"ctive !aintenance>.
A structured a//roach to equi/ment
maintenance in0ol0ing o/erators, maintenance /ersonnel, and management,
all of whom ha0e s/eci2c roles and res/onsi+ilities to eliminate
un/lanned downtime on equi/ment.
Transition strategy.
Identi2cation of s/eci2c actions required to su//ort the
im/lementation of lean manufacturing through NaiIen e0ents with minimal
im/act on e"isting /roduction C+uild ahead, +leed o1 in0entor,, /re/
wor(, etc.D.
Trans)ortation )i)eline 5anban.
Used for A:t,/e /arts that are e"/ensi0e and
com/le", with long lead:times. The method in0ol0es 2lling the /i/eline
with constantl, Lowing Nan+ans, each with a certain num+er of da,sP
demand that results in a s/eci2c num+er of Nan+ans in the s,stem. The
Nan+ans are held and released from designated /oints in the su//l, chain
so as to minimiIe the re/lenishment time to the ne"t customer.
'is"al control.
The as/ects of lean manufacturing that su//ort line:of:sight
management Ce.g., cell name signs, /ainted Loors, mar(ed PHU areas,
/erformance metricsD.
'ol"!e !atri0.
A grid that has the manufacturing /rocess across the to/ and
/art num+ers down the side. Part:num+er 0olume, in units and hours, is
a//lied to the wor( content times Cfrom the wor( content matri"D to
segregate high: and low:0olume /roducts and determine the degree of
0ariation and im/act on the cell design.
$ork content !atri0.
A grid that has the manufacturing /rocess across the
to/ and /art num+ers down the side. Part:num+er wor( content for
manhours, machine time, and setu/ time are loaded to understand 0ariation
from /art to /art and /rocess to /rocess.
$orkable work.
A /rocess to 0erif, the a0aila+ilit, of wor( elements identi2ed
as +eing necessar, for a Fo+ to go into /roduction.
$orkloa& balancing.
Shifting the wor( content elements +etween o/erations
in order to +alance the wor(load for the cell to ta(t time.
RE;ERE1&ES
:7@
References
7. $elcher, Gohn 9., Gr.,
Pro&"ctivity Pl"s
1
(ow To&ay7s Best R"n Co!)anies Are
Gaining the Co!)etitive &ge
, Houston, T>B 9ulf Pu+lishing, 7=@<.
3. o(ins, 9ar,,
Activity6Base& Cost Manage!ent+ Making 8t $ork B A Manager7s
G"i&e to 8!)le!enting an& S"staining an 9ective ABC Syste!
, hicago, ILB Irwin,
7==?.
5. onner, *ar,l !.,
Managing at the S)ee& o* Change
1
(ow Resilient Managers
S"ccee& an& Pros)er $here 2thers %ail
, &ew 'or(B #illard $oo(s, 7==3.
6. o/acino, )illiam .,
S"))ly Chain Manage!ent
1
The Basics an& Beyon&
, $oca
!aton, -LB St. Lucie Press, 7==<.
;. ostanIa, Gohn !.,
The :"ant"! Lea)
1
8n S)ee& to Market
, .nglewood, &GB G:I:T
Institute of Technolog,, 7==;.
?. 9unn, Thomas 9.,
Man"*act"ring *or Co!)etitive A&vantage
1
Beco!ing
a $orl&
Class Man"*act"rer
, am+ridge, MAB $allinger Pu+lishing, 7=@<.
<. Ha,, .dward G.,
The ;"st6in6Ti!e Breakthro"gh
1
8!)le!enting the /ew Man"*act"ring
Basics
, &ew 'or(B )ile,, 7=@@.
@. Ha,es, !o+ert H., )heelwright, Ste0en ., and lar(, Nim $.,
1yna!ic
Man"*act"ring
1
, &ew 'or(B -ree Press, 7=@@.
=. Henderson, $ruce A., and Larco,
Gorge L.,
Lean Trans*or!ation
1
(ow To Change
4o"r B"siness into a Lean nter)rise
, !ichmond, #AB The Ha(lea Press, 7===.
74. Hill, Terr,,
, &ew 'or(B Prentice:Hall, 7==5.
77. Hunt, #. *aniel,
Process Ma))ing
1
(ow To Reengineer 4o"r B"siness
, &ew 'or(B
)ile,, 7==?.
73. Imai, Masaa(i,
Ge!ba 5ai3en
1
A Co!!onsense, Low6Cost A))roach to Manage!ent
, &ew 'or(B Mc9raw:Hill, 7==<.
75. Ingersoll .ngineers,
Making Man"*act"ring Cells $ork
, *ear+orn, MIB Societ, of
Manufacturing .ngineers, 7==3.
76. Mahone,, !. Michael,
(igh6Mi0 Low6'ol"!e Man"*act"ring
, .nglewood, &GB
Prentice:Hall, 7==<.
7;. Schon+erger, !ichard G.,
;a)anese Man"*act"ring Techni-"es
1
/ine (i&&en Lessons
in Si!)licity.
&ew 'or(B -ree Press, 7=@3.
::A
7?. Schon+erger, !ichard G.,
$orl& Class Man"*act"ring
1
The Lessons o* Si!)licity
A))lie&.
&ew 'or(B -ree Press, 7=@?.
7<. Schon+erger, !ichard G.,
$orl& Class Man"*act"ring+ The /e0t 1eca&e.
&ew 'or(B
-ree Press, 7==?.
7@. Shingo, Shigeo,
A Revol"tion in Man"*act"ring+ The SM1 Syste!.
PortlandB
Producti0it, Press, 7=@;.
7=. Shingo, Shigeo,
A St"&y o* the Toyota Pro&"ction Syste! *ro! an 8n&"strial ngineering
'iew)oint
,
PortlandB Producti0it, Press, 7=@=.
34. Shingo, Shigeo,
/on6Stock Pro&"ction
1
The Shingo Syste! *or Contin"o"s 8!)rove!ent
,
PortlandB Producti0it, Press, 7=@@.
37. Shingo, Shigeo,
<ero :"ality Control+ So"rce 8ns)ection an& the Poka64oke Syste!
,
PortlandB Producti0it, Press, 7=@?.
33. Shingo, Shigeo,
The Sayings o* Shigeo Shingo
1
5ey Strategies *or Plant 8!)rove!ent
,
PortlandB Producti0it, Press, 7=@<.
35. Shirose, Nunio,
TPM %or $orksho) Lea&ers
, PortlandB Producti0it, Press, 7==3.
36. To+in, *aniel !.,
Re6&"cating the Cor)oration
1
%o"n&ations *or the Learning
2rgani3ation
, .sse" GunctionB Hli0er )ight Pu+lications, 7==5.
3;. )omac(, Games P., and Gones, *aniel T.,
Lean Thinking
1
Banish $aste an& Create
$ealth in 4o"r Cor)oration
, &ew 'or(B Simon O Schuster, 7==?.
3?. )omac(, Games P., Gones, *aniel T., and !oos, *aniel,
The Machine That Change&
the $orl&
,
&ew 'or(B Har/er ollins, 7==4.
I14EQ
::<
Index
A
A,$, material handling, ;4[;7, <;
assem+l, /roduction unit /roFect,
7@;[7=6
autonomation, <7
B
+aseline /erformance, 76@
+atch:and:queue s,stem, <3, 7;?, 7@@
+enchmar(ing, @
+ill of materials C$HMD, 7<, ;7, ;3
+loc( la,outs, 734, 737, 735, 76@
$HM.
See
+ill of materials
&
ca/acit, /lanning, 7;?
cells, 3<
audit of, 74<, 756, 75<
ca/a+ilit, of, 7<
customer, ;3
de2ning, 7==
design criteria for, 6@, ?7, <5, 73<
design of, ?@, <7, 75?, 344, 343
Le"i+ilit,, and, 7@, 57
Low of wor( through, 6?
high:0olume, 7=;[346
la,out of, ?7, <5[<6
leaders of, 3=, 7@3.
See also
leadershi/
de0elo/ment
selection /rocess for, 54
logistics, and, 6;
low:0olume, 7=;[346
manufacturing, 76
material /ull within, 76, ;6, 75;, 7?4
measurement o+Fecti0es, and, 63
num+er of, 76@
/ilot, 7<, 76=, 7@3
/roduct alignment, and, 734
/roduction, 7<
/roduct:mi" schedule for, 73<
/ull s,stem among, 7?
re0iewing /rogress of, =7
sequence of wor( introduction, 6=
ser0ice, ;7
staUng of, 3@
su//lier, 6?
wor( /lans, ;;
wor(load anal,sis, 75
wor(load of, 73?
changeo0er time, @5, 7<@, 7@<
changes
institutionaliIing, =7, 7?3, 7==
sustaining, =7[=3, 7;=, 7?3
commodit, /roduct, 7;?
::=
communication, 76<, 7;7, 7;=, 7@3
+oard, @@, 75@
lin(s, 777
/lanning, 36[3?, 6;, 73?
questions to answer, 3;[3?
conce/t design, 734, 76@
constraint scheduling, 6<
continuous im/ro0ement, 3=, 57, 5@,
5=, <=, =7, 7=;, 345
tools, 7?
controller, steering committe and, 7<3
cost of goods sold CH9SD, 5@
/N.
See
/rocess ca/a+ilit,
cross:training, 7?, 7@4
matri", 53[55, =7
culture, of com/an,, 35, 7@3
current state ga/, 77, 73, 774, 777[77@
customer /romise date de0iation, 76?
customer requested shi/ date, 76?
customer/su//lier alignment, ;3[;5
4
data
+aseline, 7<=
collection, 74;, 74@
demand, ?@
forecast, ?3
o/erational /erformance, 74;
/art num+er, <?
/erformance, 5;, 77;
/rocess Low, ?@
sales, ?3, 774
SNU demand, ?3
demand
+eha0ior assessment, 734
forecast, <4
/atterns of, 7=?, 7=<, 344
management, 7<, 734, 7?7
de/lo,ment, 757[75@
design criteria, 734
design for manufacturing/assem+l,
C*-MAD, 7<
desired state, 76@
detailed design, 76@
*-MA.
See
design for
manufacturing/assem+l,
direction, 7;=
dis/atch list, 6=
*uPont model, 5?[5@
E
elements anal,sis, 776
em/lo,ees, and engagement in lean
manufacturing, @
em/owerment, ?, 3<, 3@
errors 0s. defects, @6
e"ecution, of im/lementation /lan, 76@,
76=
e"it criteria, 734, 733, 75<, 75=, 7?=, 7==
e"/editing, 7<?, 7@?
;
failure mode and e1ects anal,sis
C-M.AD, 7<, =3
fear, 36
-I-H.
See
2rst:in/2rst:out
2rst:in/2rst:out C-I-HD, 6<, ;6, <3, 347
-i0e Primar, .lements, 5, 6[?, 74,
37[=3, 747, 74;, 7;4, 7<7, 7=3, 343
;S house(ee/ing, @4, @;[@<, =7, 75;,
75<, 75=, 7<=, 7@4, 7=@
Le":fence demand management, 7<
Le"i+ilit,, @4, 7<@, 7<=
-M.A.
See
failure mode and e1ects
anal,sis
64/?4 rule, ?5
future state design, 77, 73[75, 774, 777,
77=[754, 76@
G
ga/ anal,sis, 74;, 76@
goal alignment, 5?, 64[63, 743
goals, common, 7;=
Glossary
::5
,
high:0olume /roFect, 7?;[7<5
holistic, de2ned, 5
Hoshin /lanning, 64, 67
house(ee/ing.
See
;S house(ee/ing
I
im/lementation logic, 734
im/lementation /lan, 73<, 73=, 76@
incenti0e:+ased /a,, 7?@, 7?=, 7<3, 7<?,
7@?
in/ut/out/ut control, 6=
in0entor, turns, 5, ;6, <?, ==, 75=, 766,
76?, 7;?, 7?<, 7<3, 7=@, 7==, 345
M
Fust:in:time CGITD, 6@, ;5[;;, <?
B
NaiIen e0ents, 76, 7?, 7<, =7, 77@, 73?,
757, 755, 75?, 7;;[7?5, 7??, 7?<,
7<7, 7@?, 7@<, 7=4, 7=7, 7=3, 7=@
focused factor, /ilot, and, 7<;[7@5
sam/le agenda, 7;@
Nan+ans, 7<, 6?, 6<, 6@, 6=, ;4, ;7, ;@,
?=, <7, <5, 735, 73@, 75;, 75?, 75<,
75=, 76@, 7?4, 7??, 7?@, 7?=, 7<@,
7<=, 7@4, 7@?, 7=@, 344, 347, 345
demand signals, ;5[;;
identi2cation requirements for, <?
siIing of, ?7, <6[<<
'
leadershi/, 7;=
leadershi/ de0elo/ment, 36, 3=[54
lead:time, <?, 76?, 7<3, 7<?, 7<<, 7<@,
7<=, 7@3, 7@<, 347
minimiIing, <7
lean assessment, 74, 77, 74;[774, 776,
755
lean enter/rise, 7;<
lean manufacturing
a//roach, <[7=
audit, 7?
communication, 74, 76, 36[3?. See
also
communication /lanning
engaging em/lo,ees in, @
focus of, ?
holistic 0iew of, 5[?, ?7, =;
im/lementation methodolog,, 7;
issue/element matri", 77<
/rinci/les, 7;
requirements /lanning, and, 6@
road ma/, =, 74, 7?7
self:assessment, 74?, 74<
team, @[7=, 7@3.
See also
team
techniques, 7?7
CTPMD, and, @5.
See also
total
/roducti0e maintenance
unions, and, 57, 7?@, 7?=, 7<3, 7@?
0s. mass /roduction, <
le0el loading, ;;[;?, <4, 75<
line:of:site management, @<, 7@4
loading charts, <3
localiIed o/timiIation, 5@
logistics, 6, ;, 75, 6;[;=, 747.
See also
de2nition of, 6;[6?
losses, si" +ig, @5, @6
M
maintenance.
See
total /roducti0e
maintenance CTPMD
manufacturing deli0er,, 76?
manufacturing Low, 6, ;, ?7[<<, 747,
7?4, 7<=.
See also
-i0e Primar,
.lements
manufacturing resource /lanning
CM!P IID, 6@, ;4, ;7, ?5, ?@, 7;?,
7?=
manufacturing strateg, outline, 77
mar(et segmentation, 74=
::>
master /roduction schedule, 7;?
material +ac(Lushing, 7<
material handling CA,$,D, ;4[;7
matri"
cross:training, 53[55, =7
decision, 734
issue/element, 77<, 755
o/tion selection, 737
/rocess, ??
0olume, ?@, ?=, 73=
wor( content, ??, ?<, 73=
measures, =7
de2nition of, 5?, 63[65
o+Fecti0es of, 63
out/ut:+ased, 5?, 5@[5=
/erformance, @<[@@, 7?7, 7?3
/rocess:dri0en, 5?, 5=
metrics, 6, ;, 5;[65, 747, 7<3.
See also
mista(e /roo2ng.
See
Po(a:,o(e
mi":model manufacturing, 7<, ;<[;@
one:/iece Low, ?7, <7[<5, 75;, 75<, 75@,

7?@, 7<@, 346
cell, 0s. +atch and queue, 7@@
on:time deli0er,, 7<?, 7<@, 7@3, 7=5,
7=@, 345
o/erational roles and res/onsi+ilities,
36, 54[53
o/erations redesign /rogram, 765[7;6
order /rocessing, 7<
organiIation, 6, ;, 35[55, 6<, 747.
See
also
organiIation chart, 734
organiIation conce/t, 734, 737, 736,
73;, 73<
original equi/ment manufacturers
CH.MsD, ?3, =?, 76;, 7;?, 7=?
o0erall equi/ment e1ecti0eness CH..D,
@6
ownershi/.
See also
/rocess owners
realignment of, 3<
results, 5?
P
Pareto diagram, 77<, 755
ParetoPs @4/34 rule, ;4
/arts, sorting of, ;3.
See also
A,$,
material handling
/erformance le0els, =7, 744
/lanning
ca/acit,, 6=
in:+ound, 6?
internal, 6?
out:+ound, 6?
/riorit,, 6@
/lanning and control function, 6<[6=
/lant load /ro2les, 734
/oint of use CPHUD, ;6
Po(a:,o(e, 7?, @4, @6[@;, 7<@
PHU.
See
/oint of use
/ro+lems, documentation of, @@
/rocess ca/a+ilit, C/ND, 7<
/rocess control, 6, ;, <=[=4, 747. S
ee also
/rocess c,cle time, 5=
/rocess Low, 75;
/rocess ma/, ?7, ?6[??, ?@, 73<, 7<@
/rocess matri", ??
/rocess owners, 75, 76, 773, 73?, 76=,
7;3[7;5, 7?3, 7?=, 7<3, 7@3, 7@=,
7=4, 7=5
/rocess qualit,, 5=
/rocess 0alue anal,sis CP#AD, 73
/roduct alignment, 734
characteristics, ?3
/roduct deli0er,, as out/ut measure, 5=
/roduct demand anal,sis, 73@
/roduct demand +eha0ior, 734, 737, 756
/roduct de0elo/ment, 7<
/roduct life c,cles, 7;?
/roduct qualit,, as an out/ut measure,
5=
/roduct/quantit, CP/SD anal,sis, ?7,
?3[?6
Glossary
::6
/roduct:focused res/onsi+ilit,, 36,
3?[3@
/roduction loss, 755
/roduct:mi" schedule, 73<
/roFect charter, =, 74, 747, 736, 7@@
sam/le, 743
/roFect management
assum/tions, 7@
com/onents of, 74
/roFect milestone /lan, =, 74, 747, 743,
736, 7@@, 7=7, 343
sam/le, 745
/roFect time lines, 7;4, 7?4, 7<4, 7@7,
7=7, 343
P#A.
See
/rocess 0alue anal,sis
N
quic(:hit list, 77@
R
!AA.
See
res/onsi+ilit,, accounta+ilit,,
and authorit,
rate:+ased schedule, ;?, ;@, ?=
release and control, 6<
re/eater /roducts, ?5, ?6, 7;7, 344, 347
res/onsi+ilit,, accounta+ilit,, and
authorit, C!AAD, 74, 3<, 73?, 7;3,
7@<, 346
return on in0estment C!HID, 5@
roll:through ,ield, 5=, 744, 77;
root cause anal,sis, 776
routing anal,sis, ?7, ??[?=
rules, ownershi/ of, 6<
runner /roducts, ?5, ?6, 7;7, 344, 347
S
scheduled time a0aila+le, <4
Sei(etsu, @<
Seiri, @?
Seiso, @<
Seiton, @?
self:assessment, <, @
ser0ice cells, ;7
setu/s, @4, =7, 75;, 347
internal 0s. e"ternal, @7
reductions in, 7@3, 7@?
standardiIing, @3
Shitsu(e, @<
single:minute e"change of dies
CSM.*D, 7?, @4[@3, 75=, 7??, 7<@,
7<=, 7@4, 7@<, 7=@
SIPH, 73, ;5, 777, 775, 73<
SM.*.
See
single:minute e"change of
dies
s/aghetti diagram, ?;, ??
SP.
See
statistical /rocess control
staUng /roFections, 734
statistical /rocess control CSPD, 7?
stoc((ee/ing units CSNUsD, ?3, <3, 74@
stranger /roducts, ?5, ?6, 7;7, 344, 347
suggestion +o", 746, 73;
su//lier interface, 775
su//lier /erformance, 76?
su//l,:chain management, 76;
su//ort, 7?4
"
ta(t time, 76, ?7, ?=[<7, 73?, 73<, 756,
75;, 347
de2ned, ?=
designed, 73@
0s. c,cle time, ?=, <5, <6
0s. machine time, <7
0s. man time, <7
team
candidates, @[=
full:time 0s. /art:time, @, 7;3, 7=5, 345
mo+iliIation of, =
roles, @, =, 74, 76, 75;, 7;3, 7@=, 7=5
time o+ser0ation form CTH-D, ?<
total /roducti0e maintenance, 7?
total /roducti0e maintenance CTPMD,
@4, @3[@6, 75=, 7<@, 7@<, 7=@, 346
t,/es of, @5
TPM.
See
transition strateg,, 73<
::?
.
unions, 57.
See also
lean manufacturingB
unions, and
+
0isual controls, @4, @<[@@, 75;
0olume matri", ?@, ?=
*
waste, 776, 77;, 755, 75;, 7=?
wor( content matri", ??, ?<
wor( in /rocess in0entor,, ;6, 7@<
wor( instructions, @4, @@[=4, 75;, 75<
wor(a+le wor(, ;@[;=
wor(Low management, 6<
wor(force /re/aration, 36, 53[55
wor(load +alancing, ?7, <7[<5
wor(sho/ training, 7;4, 7<7, 7@7, 7=3__

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Lean

7.34D ] 3=4 units designed dail, /roduction rate

?4 minutes, or 634 minutes. *i0iding 634 minutes

; card, or electronic, whate0er,K e"/lained !ichard.

C"rrent State Ga)

%"t"re State 1esign

/rocess ,ieldM used to understand the e1ecti0eness

one:/iece Low, ?7, <7[<5, 75;, 75<, 75@,

7.34D ] 3=4 units designed dail, /roduction rate

?4 minutes, or 634 minutes. *i0iding 634 minutes

; card, or electronic, whate0er,K e"/lained !ichard.

C"rrent State Ga)

%"t"re State 1esign

/rocess ,ieldM used to understand the e1ecti0eness

one:/iece Low, ?7, <7[<5, 75;, 75<, 75@,

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